Ep 46 Thriving Through Turbulence: RPO Leadership Resilliance with Terry Terhark

Global RPO revenue growth took a stark turn, with 2024 marking a -13% drop and 2025 showing flat or even negative growth (according to multiple industry analysts). As the RPO industry faces unstable markets, leaders must navigate economic uncertainty, mounting client caution, and the soaring demand for frontline hiring. Only those who adapt strategy and blend innovation with trusted relationships will seize the opportunities in this challenging climate.

Confronting this turbulence, this episode—recorded live at the 2025 RPOA Annual Conference, cementing RPOA’s role as the trusted convener for the industry—dives deep. Host Lamees Abourahma sits down with RPO pioneer Terry Terhart (former CEO, enterprise RPO leader) to share how RPO providers can balance AI with human touch, sustain profitability, and stand out through flexibility, creativity, and enduring client partnerships. Tune in for actionable strategies from the heart of the RPO community.

NXTThing is a sponsor of the 2025 RPOA Annual Conference and a Silver Member of the RPO Association.

Learn about and find more content from the 2025 RPOA Annual Conference here. 

About the Podcast

Time to Hire is produced by the Recruitment Process Outsourcing Association (RPOA), the leading authority on recruitment process outsourcing (RPO) foresight and innovation, and the trusted convener for the global RPO community. Through conversations with industry leaders, the podcast explores the trends, insights, and innovations shaping the future of talent acquisition.

Learn more about RPOA and join the community at: https://www.rpoassociation.org.

Follow the host, Lamees Abourahma, on LinkedIn.

Transcript

Introduction & Conference Context

Lamees Abourahma: What if the most turbulent markets are also where the greatest opportunities lie in the world of recruitment process outsourcing (RPO)? Thriving means knowing when to embrace new technology and when to lean into the power of relationships. Welcome to Time to Hire, the podcast from the Recruitment Process Outsourcing Association, where we explore stories and strategies shaping the future of talent acquisition. I’m your host, Lamees Abourahma. In this episode, recorded live at the 2025 RPOA Annual Conference in Chicago, we hear from industry pioneer Terry Terhart as he shares hard-won lessons on leadership, innovation and resilience in a turbulent market. If you’re looking for practical ideas to help your RPO business thrive through change, you’re in the right place. Grab a notepad—there are plenty of takeaways you’ll want to remember. Let’s listen to Terry.

Building an RPO Career & Perspective on Change

Terry Terhart: Thank you, Lamees, and good morning everyone. It’s a pleasure to be here and excited to share some perspectives on how you can win in what some might call turbulent times. I’ll start with a bit about myself. I started in 1984 as a contingency recruiter and opened my first RPO in 1990, a company called Selective Staffing, which I later sold to AON in 1998. That acquisition, unfortunately, was terrible, but I moved on and founded Right Thing, which grew to about 1,200 recruiters and was eventually acquired by ADP—a much better outcome. In 2019, I launched Next Thing, though now I’m less active in daily operations and more involved in advising and big client relationships.

Let me also share my thoughts on AI in RPO. I listened intently this morning to how our future is destined to change. I believe recruiting is a balance of human touch and technology. The pace of change has accelerated so much—when fax machines seemed revolutionary, we couldn’t imagine what came next. AI has brought efficiency, but it can’t fully replace recruiter judgment and influence. Our challenge is balancing advanced technology for efficiency with the irreplaceable value of relationship-building.

Navigating Tough Markets & Economic Uncertainty

I’ve consistently delivered good EBITDA, whether part of a public or private company. I’ve experienced some of the toughest times in RPO, especially the 2007-2008 financial crisis, where overnight, clients canceled openings across industries. Interestingly, despite that, from 2007 to 2008, we grew by 150%. This year, we’re up 50% over last year. But these remain awkward times for our industry—a dichotomy in the economy: all growth is in frontline hiring, while professional hiring stays flat or challenged. Companies are cautious, not backfilling, and this uncertainty limits opportunity.

Industry Trends & Challenges

We’re being pushed to innovate while facing increasing costs from sourcing channels. Primary job sources keep raising prices, whether through licenses or postings. At a recent Indeed conference, I heard from their head economist: unemployment remains near 20-year lows, which usually signals strong economic times, yet there’s mounting uncertainty—unclear inflation and tariffs challenge company planning.
Job postings are still above 2019 levels, though off post-COVID highs and job gains are dwindling. At one point, there were nearly two job openings for every unemployed person; now, it’s less than one. This creates a strange situation: plenty of resumes, but perceived lack of quality. Candidate fraud has become a routine client concern. For example, we recently discovered at the background check stage that a candidate misrepresented their country of residence.

Market Size, Revenue, and Growth Outlook

When reviewing industry size and projections, research (including input from ChatGPT) points to strong growth up to 2021 (doubling digits annually), but negative 13% in 2024 and flat or negative for 2025. Analysts expect a return to double-digit growth by 2028. I also attempted, with limited data accuracy, to estimate revenue for top RPO firms—these numbers can be tricky to pin down, sometimes conflated with MSP revenue.

Labor force participation rates are expected to decline, though not as low as the pandemic years. This underscores continued pressure on companies. I’m often asked if it’s a candidate or employer market; in my view, it’s always a candidate market and service offerings must always put the candidate first.

Winning Strategies in a Shifting Market

How do you stand out in a shifting market? Move to the highest areas of hiring—right now, high-volume and healthcare, especially frontline positions like manufacturing, distribution, retail, and hospitality, are hot. Modularizing your service offering leads to more opportunities, often deals that aren’t competitive or forwarded through procurement. Relationships matter: last year, a major win came from a long-standing connection with a CHRO, resulting in a non-competitive, rapid contract. Sometimes accepting smaller, less typical projects delivers a “foot in the door” to major long-term business.

We’ve found opportunities in serving smaller and mid-sized companies, where deals are less competitive and bypass procurement. Being flexible with service offerings—and open to new types of work—opens more doors.

AI Consulting & Technology Differentiation

Clients are confused about AI. I often get asked basic questions—some are simply told by leaders to “get some of that AI.” For RPO providers, the real value comes from being the expert: guiding clients whether to build or buy, and how best to deploy it in their context. Despite industry excitement, there’s not yet a true AI platform that transforms RPO in a game-changing way. Tools like chatbots or AI sourcing improve efficiency, but the impact is still settling in. Owning proprietary technology has been a competitive edge for my companies; it’s difficult, but worthwhile for differentiation, even as offering stand-alone technology.

Maximizing Client Relationships & Revenue

Most deals we undertake are up to the executive level, and executives often only recruit through us once a solid relationship’s established. It’s critical to upsell to existing clients—be it branding, technology, or interview training—as upselling existing relationships is more fruitful than chasing new ones.

Adapting to Economic Uncertainties

How can you prepare for and navigate economic uncertainty? Align resource costs to actual work performed. Part-time staff, if managed well and given schedule flexibility, can be as effective as full-time—this model has worked exceptionally for us. In tough times, flexibility in contract terms leads to stronger, long-term client relationships. I never hold clients to contract minimums; being rigid can backfire and lose multimillion-dollar deals.

Scrutinize external spending—do you need all those licenses and postings? We operate fully virtually, avoiding office overhead and enabling talent from anywhere. Evaluate your criteria for seeking new sales, and be selective with risk. For guarantees, be cautious—offer them only when you truly understand a client’s turnover and risk profile.

Future Outlook and Optimism

Looking ahead: I don’t expect major changes through the rest of 2025, as year-end budget cycles take hold and hiring slows down. However, I sense pent-up demand for hiring, especially professional roles, and believe a return to growth is on the horizon as economic certainty returns. AI’s real impact will become clearer as adoption matures, mirroring other tech disruption cycles. Remain optimistic, plant seeds, and prepare for the next wave of industry opportunity and growth.

Closing Thoughts & Community Invitation

Lamees Abourahma: I hope you enjoyed this episode of the Time to Hire podcast from the Recruitment Process Outsourcing Association. Please give us a review wherever you listen to the podcast. Stay connected, engaged, and informed about talent and recruiting trends by tuning in to RPOA—the place to go for RPO.