“Isn’t it great when you can find talent anywhere?”

Talking with Richard Crespin, Executive Director of the Human Resources Outsourcing Association – the only professional membership association committed to promoting the advancement of human resources transformation in complex organizations.

“Recruitment process outsourcing should offer a flexible working arrangement that allows companies to navigate the minefield of legislation”
-Richard Crespin

HRM. According to your May 2005 Mid-Market HRO Survey, nearly one third of respondents were not outsourcing any HR activities. Where do you forecast growth?
RC. I would divide it into those companies that are in the Global 1000 and those that are not. For Global 1000 companies we have definitely “crossed the chasm” and this [HR outsourcing] is a very accepted practice. For whatever reason large scale outsourcing has taken hold faster and on larger scale in English-speaking countries [but] I think it’s going to be across all industries in the Global 1000. It used to be the more cost conscious and the more highly competitive industries, like financial services, but now, among the Global 1000, it’s going to be universal.

HRM. Outsourcing was met some resistance, especially from unions. Have we moved past that?
RC. We are seeing two broad cultural trends: there is a group of workers and companies that are moving along a free-agent path, where the employee and the employer are seeking more choice in how they arrange working relationships. This culture is fertile ground for outsourcing. The other cultural trend is where people – both companies and employees – are seeking a greater level of stability and assurance in their working lives. Think of the protests in the US from immigrant populations seeking the right to work compared with the protests in France where people were seeking stability.

HRM. With an effective, long-term recruitment strategy central to growth in most industries, should more organisations be re-evaluating their HR policies?
RC. Absolutely. I spoke with two of our members, Kelly Services and StraightSource. Both of these companies specialise in recruitment process outsourcing, so they are on the front edge of what is going on with recruitment policy and HR policy in this regard. Both of them think that companies should be rethinking their HR policies.

There are two forces pulling at companies: free agency versus stability. Then there are advancing technology and globalisation, which are making it easier for people to work for certain industries. A third force at play is the power between employees and employers. According to StraightSource, depending on which company you are trying to snap into and what skill you are trying to snap into, if you can take advantage of free agency and technology you can seek out the best possible player without regard to geography.

A lot of companies here in the US have geographic headquarters or geographic offices in certain locations, but because of free agency trends and technology they are able to say: “you can stay in Utah even though we are in New York”.

You have to re-evaluate your HR policies in that regard: how can you take best advantage of the trend towards free agency, the trend towards greater flexibility in working relationships, and the technology that supports those? If you are in a highly competitive market and talent is scarce, isn’t it great when you can find that talent anywhere?

HRM. Some commentators are predicting a ‘talent war’ as firms increasingly look to their staff to provide competitive advantage. What are the implications of this for both employers and staff?
RC. Clearly there are large demographic forces at work that are going to cause a talent shortage – our baby-boom generation is nearing retirement, combined with the aging of the population in Europe and in Japan. The folks at Kelly Services predict a greater global war for talent. It is not going to be limited by geography anymore and the successful companies will be those that have HR policies and recruitment strategies focused on being able to find the right staff, wherever they are.

HRM. Is outsourcing search and recruitment functions to a specialist provider the way forward? What advantages does this model offer?
RC. Going back to your original point about only one third of companies having outsourced HR, what is interesting is that more recent studies show that close to 50 percent of companies are considering outsourcing some piece of HR. Large-scale HR outsourcing may not be for everyone, but looking at specific processes like recruitment for outsourcing is definitely on the rise and, I think, can offer tremendous advantages to companies.

Recruitment process outsourcing, to us as an association, has been our biggest growth area. We have seen many, many new companies entering that field and many, many companies contemplating it. Recruitment is a highly specialised thing and outsourcing it can offer some tremendous advantages: the ability to work with an outsourcer who knows and shares the risk of the legislative requirements across borders, for example, is a huge benefit. Secondly, recruitment is a ‘variable’ activity: you don’t generally recruit at a constant rate. The principal benefit of outsourcing in general, is that you take a fixed cost and you make it a variable one. If you have the right relationship with your outsourcer you can arrange it so that you ‘pay by the drink’.

Lastly, recruitment is a specialised skill. The people that you have working for you may be great managers, they may be wonderful sales people, or wonderful researchers and certainly well skilled in their area, but that does not necessarily make them well suited to finding the talent that you need. By outsourcing recruitment, you are getting a higher level of specialisation – assuming that you pick the right outsourcer.

HRM. Are there some simple guidelines to picking the right outsourcer?
RC. There are some definite criteria that can be used and, in fact, one of the things that the association is working on this year is coming up with some standards for the industry.

Some of the things that need to be considered are: what geography are you looking at? What is the cost structure that you are looking for? What is the right cultural fit? That is probably one of the biggest things that we hear from our members; it has to be a good cultural fit.

HRM. Given the complexities and demands of the legislative minefield, what will be the impact of the shift towards outsourcing recruitment? What do you see as the major benefits and potential pitfalls?
RC. Recruitment process outsourcing should offer a flexible working arrangement – with a knowledgeable outsourcer – that allows companies to navigate the minefield of legislation. Increasingly, people are recruiting across borders, across states, regions and nations, and the right outsourcer should have knowledge of the legislative requirements of the regions from which you are recruiting so that they can help protect you from those issues.

The minefield is a bitter one and general legislation tends to lag behind actual working practise, so we will always be in a state of uncertainty about how governments are going to treat or change the laws governing how people recruit and hire and retain. When things get legislative attention, people are right to be nervous because things can shift suddenly.

The other thing that I think a good outsourcer can help you with is cultural awareness. They can help you mesh your corporate culture to the employee, but they can also help you navigate the different cultures of the different countries that you are working in. I think that those are the principal benefits.

For more information: www.hroassociation.org