The
short term impact of functional/tactical outsourcing
for the aquisition and management of human capital
The number one driver behind
the growth in functional/tactical
outsourcing for the acquisition and management of human
capital is an increase in the number of firms,
corporations and institutions that are reviewing their internal
operations in an attempt to focus on their true core competencies.
All other internally provided services then become candidates
for examination in terms of how efficiently and effectively
those services are being delivered compared to what is available
from an external service provider.
A
secondary driver of growth
in these solutions is a desire by these entities to improve
their current service levels.
The
third and perhaps most prominent
driver is a desire to extract all possible costs from within
their internal operations. Any chance of decreasing transaction-processing
costs frees up precious capital that can then be applied
to more strategic initiatives.
The
fourth driver is the advent
of technology improvements that can track effectiveness,
empower the users, bring efficiencies, reduce redundant
efforts or deliver solutions that were not or are not available
from other means.
The
resulting affects of these drivers will be noticed across
all sectors of the employment industry.
Professionals at every level in the human capital supply
and management chain can expect changes.
In
the human resources groups of small, medium or large entities
the changes in job title, function and the number of professionals
employed has begun to have implications. The trend of selective
outsourcing where adminstrative tasks are most commonly
outsourced began in the late 1960's when ADP came on the
scene to handle the payroll function.
Today there are numerous adminstrative functions that are
outsourced. In addition, human resource departments have
introduced a wide range of technical solutions to reduce
the need for HR staffers to tackle the mundane. Often the
strategic goals of the enterprise are not integrated with
the tactical cost and the time savings programs. For instance,
strategic recruitment efforts are combined with non-strategic
hiring and management programs and the results are a reduction
in share holder value.
Employer
entities can outsource all of their HR and recruiting programs
to outside firms. HR professionals either become part of
the strategic revenue focused efforts or they are endangered.
The most common situation (75% of employers of all sizes
and shapes): HR staffers are expected to accomplishment
more with less.
Human
Resources executives, 'C' level executives and corporate
boards
are openly speaking about the importance of focusing on
core competencies and for the need to improve the value
of their human capital assets. Only small percentages of
the employers who can achieve significant benefits from
a greater intraspective effort have part taken in this activity.
Waste and ineffective programs and processes are still the
norm.
HR Outsourcing and consulting firms,
or consulting pracitces within staffing firms
have taken aim on this target. The opportunity is huge.
The communication distribution of the necessary education
to their audience is limited today. Many employers have
not been exposed to appropriate materials that outline the
ROI, to them. Only a handful of these firms maintain robust
marketing presence. In addition, these efforts are generally
focused on an extremely small population. The opportunity
to create and build a powerful platform to educate this
audience is similar to IT's opportunity to sell technology
in China.
Staffing,
contingency and executive search firms are activitely adding
practice areas to add services to help employers realize
the greatest ROI from their acquisition
and human capital management
programs. These firms are challenged to find
sales professionals who can understand, present, consult
and close multi-year complex, enterprise wide, big ticket,
6 months plus sales cycles. Firm ownership and management
is typically limited in their understanding of the growth
and development of this level of sales effort.
Most common results are disappointing and typically blamed
on the economy or sales- personship. In this case the problem
lies in the design of a complete and totally different sales
and marketing philosophy. Moving outside their comfort zone
requires more than a willingness to invest dollars and time.
The most effective teams, work off references or referrals
and can not be defined as a pure sales team. These organizations
can be successful but typically can
not scale.
High-tech,
enterprise, global, Internet based recruiting solutions
can improve the organization and process of candidate flow
management. The inefficiencies and weaknesses of these programs
are often covered up to justify the high costs of investment.
A realistic view of dynamics of a
multiple channel program, the costs of candidate
sourcing and delivery for
the fulfilment of 'a world class team of employees built
to win and last' will begin to return
the investment in spades!
Staffing,
contingency and executive recruitment organizations have
been selectively outsourcing activities for years. Virtual
researchers have been employed since the mid-1980's. The
introduction of the Internet into the firm offices were
accompanied by insourcing of the research function. Today
the indepth knowledge, technical expertise and low cost
Internet connections have created a new paradigm. Research
functions and research firms have entered the landscape.
On first blush these firms appear to be low cost competition.
Perhaps? Perhaps there is an opportunity for recruiters
to 'off' the heavy lifting to others. Firms and individual
recruiters will have time to improve client development,
improve candidate vetting and offer additional services
to their 'needy' clients.
Looking
to the future,
we expect enterprises to increasingly narrow the activities
they deem to be core, and critical. An example of an early
adopter of this view is a company such as Nike, whose core
competency is brand management, with all other activities
carried out by external service providers. As this view
of what is a core process narrows, and is increasingly adopted
by enterprises at large, more and more processes will become
candidates for functional/tactical
outsourcing/insourcing.
