Written by
Changeboard Team

Published
29 Jul 2010

Trends in outsourcing

29 Jul 2010 • by Changeboard Team

The importance of outsourcing

Why is recruitment outsourcing growing in importance?

Outsourcing in the UK was originally seen as a way of reducing costs and passing clerical and low-level customer contact tasks to another company and often another country. While the practice certainly had a positive budget impact for most businesses the impact on customer service and perception was far more problematic.

IT outsourcing

The next big trend was IT outsourcing with major businesses reducing risk, enhancing their access to technical skills and putting a difficult area of cost and project management into the hands of specialists who could genuinely add value to the decision making processes.

Now many aspects of Human Resource work are also being outsourced. The 1st type of outsourcing occurred in businesses where large number of very similar staff had to be recruited frequently such as in 1000 people call centres where staff turnover can be 30% a year. The service being provided was handling volume efficiently and cost effectively – value added services were not really relevant.

 

HR trend following IT Model

 

The trend in Human Resources outsourcing is now beginning to follow the IT model where what is important is to be able to access the latest methods and in-depth technical expertise and outsource that to a specialist company.

This is happening for a number of reasons. Clearly the general down-sizing of HR departments has often led to internal skill gaps where no-one is an expert on advertising, attracting or managing the candidate process.

This has also been made much more difficult because as new figures have revealed on average there are 10 jobseekers for every vacancy advertised in the UK. In one area of the south-east, 60 workers are available for each job. So the Challenge is to construct a fair, sensible process that filters applicants efficiently but ensures that the right people are short-listed and then incentivized to join the company.

Lastly as with the IT world, business processes are changing at such a fast pace that only a professional company focused solely on the area can keep at the forefront of innovation and ensure that your company sees the best applicants.

Many job roles are now only advertised online, so the 1st phase of review and psychometric testing is being done without any contact with a member of staff. Designing and managing this process is a highly skilled process. This is because one has to balance the need for information, with the ease of use of the site and genuine insight into the applicant while ensuring that equal opportunities and other legislative requirements are obeyed.

Technological advances are also making it far more difficult for an internal HR team with many other priorities to win the battle for talent. It is said that 60% of roles are filled by some type of networking; this used to mean “the old boy network” and “the golf-club”. Nowadays this is mostly via sites such as linkedin.com and social networking sites where professional recruiters access possible candidates and reference them before any formal approach is ever made. How to communicate vacancies in a way that attracts candidates and people willing to suggest colleagues is a science in itself. The more specialist the role the more difficult it is to ensure that the right people see it and are motivated to apply. The secret is not to get 2000 responses but to get the 5 people world-wide who could do the role at the very top end of performance to apply.

This is why recruitment outsourcing is becoming so essential for dynamic businesses.