Amidst a flurry of political and social controversy, the Olympic Games are underway, and for the international firms responsible for staffing the Sochi Games, they hope it’s all downhill from here.

Sochi’s three official staffing Suppliers: Adecco Group, Kelly Services, and Russian firm Exect Business have put three years of work into building the Contingent Workforce for the Olympic Games and the sheer numbers are staggering. The total number of temporary workers for the games may top 150,000 people, and that isn’t counting the roughly 25,000 volunteers that will be lending a hand to make sure the games run smoothly. Among those 150,000 workers 65,000 are skilled workers. These skilled workers were culled from a worldwide recruiting search, offering the opportunity for the organizing committee of the games the chance to hand pick expertise from the very best the world has to offer, as well as the chance for those skilled workers to show off their talents in front of an audience like no other. On paper it’s the perfect trade off, but somewhere along the way things went off the rails. Sochi-2014-Company-Olympics

Vancouver temporary worker Johnnie Balfour’s exposing blog posts and statements about the treatment of himself and his team at the games has been well documented. (Go here to catch up) Even an entire twitter feed, @SochiProblems emerged to document all the issues journalists and athletes alike had encountered upon first arriving in Sochi. Littering news feeds around the world with pictures of brown water and unfinished construction. While these images weren’t exactly the image that the staff and Olympic Committee wished to have us see, the big picture moment of truth for the staffing agencies of the games going forward may not be boiled down to pictures or politics. It may boil down to the larger issues of transparency and control.

For those in the business of the Contingent Workforce this is an issue of risk debated and managed daily, as the decision to either outsource or direct source (hire from within) is weighted against the factors of cost, availability of resources (skills), and time. As the world’s eyes turn to Sochi for the games, administrative/payroll miscues and a lack of communication is not the way to put our (those in the contingent workforce solutions business) best foot forward. In this case, while a pool of extremely talented and eager workers were recruited and gathered for the games, it seems as though when they got there, the communication regarding their income was (at least according to Balfour) left open to interpretation . There is nothing that will turn an IC (independent Contractor) off faster than the notion that they’re not getting paid, and in Balfour’s case, seemed to be the last straw.

As an Employer and a Business you only get one chance to make a first impression with your Contingent Workforce and Independent Contractors. Making sure your T’s are crossed and your I’s are dotted is an absolute must in an industry where word travels fast.  If your goal is to recruit and retain top talent, miscues are simply unacceptable. In the case of Balfour, the simple and affordable option of an IC Compliance and Payroll service could have been made available to figure out payment options and schedules before he even left for Sochi, and in the process, saved the staffing agencies responsible for 150,000 workers the potential firestorm of being made to look as a willing participant in the headache inducing and livelihood threatening payroll practices of the Sochi Games.

There is truly no replacement for transparency and efficiency in this business and the sheer size and publicity of this only goes to remind us that even a small administrative miscue or oversight can become a giant problem.    

If all goes according to plan when the games close on February 23rd, viewers will hopefully be inundated with images of the athletes’ fists in triumph, their tears in defeat, and memorable moments of sportsmanship and diplomacy. Not pictures of brown water, unfinished construction, and the supposed mismanagement of temporary workers. If the stumbles in the weeks leading up to the event are any indication, the staffing agencies may be the ones in the front row cheering the loudest for the athletes to steal back the spotlight.

I was just reviewing the predictions I made for 2011 written at roughly this time a year ago. Much of what I thought would happen unfolded as expected, except for talent management. I had thought there would more focus on integrating the employee development and recruitment functions, and more internal hiring. I still think that’s on tap for this year. I was on target regarding hiring: There was no great uptick in the volume of hiring, and unemployment remained static. And I was on target with predicting that social media would be core to recruiting success and that RPOs would thrive.

Over the past two years, the way we think about work has changed. Perhaps accelerated by the recession, there is more focus now on finding satisfying and rewarding work than on just finding a job that pays the most.

More people are thinking about finding something interesting, challenging, and perhaps even fun to do that provides enough income. The key words here are interesting/challenging and enough. Fewer expect to get rich and there is less focus on the money. There is more focus on lifestyle, flexibility, free time to pursue other learning or hobbies or sports, and less interest in family. I’ll do more columns on these trends soon, but partly because of them here are the major changes that I see happening this year.

Internal Recruiting Goes Mainstream

Perhaps one of the most significant trends will be a greater focus on finding current employees to fill existing jobs. Rather than continue time-consuming and expensive external searches, more hiring managers will opt to go with an almost-ready internal candidate who is a good cultural fit and is willing to learn fast. Although hiring managers may push back at this, management will encourage it, and the increasing difficulty in finding and recruiting top talent will help accelerate the trend.

Over the next few years there will be a move to enlarge the skills of current employees so they can be moved around to different functions as demand fluctuates. Employee development will morph from delivering training, to providing accelerated apprenticeships, developing simulations, and finding ways to encourage informal and on-the-job learning.

Recruiters should focus on encouraging hiring managers to look at these internal employees, encourage them to hire internally, and develop better internal talent communities to expose hiring managers to talented employees and employees to opportunities.

Social Goes Mobile

When recruiting does look externally, more of it will happen on mobile devices. The explosion of Android and iPhone apps means fewer potential candidates will be using traditional computers.

Clearly candidates with technical edge and savvy — the ones you are probably the most interested in hiring — will be spending most of their time on smart phones, iPads, and other tablets. If you have not developed specific recruiting apps that take advantage of these mobile platforms, you will be at a disadvantage as we roll into the middle of 2012.

More applicant tracking systems are now capable of using a social profile rather than a resume, and as most candidates already have such a profile it only makes sense that they use it to apply for a position.

Everything from branding to screening to even doing interviews is moving to mobile platforms and using such things as simulations, video, and chat. Twitter, Google, Facebook, and other major players will introduce more mobile apps and functionality during this year.

By the end of 2012, the traditional career site will be mostly obsolete. If it exists at all will be little more than the place where the candidate makes the formal application. Smart firms will make everything they do mobile-friendly and compatible and encourage candidates to interact more with hiring managers, other employees, and even alumni in online forums, chat rooms, Twitter chats, and via video, Skype, and other similar media.

Just-in-time Sourcing and Recruiting

Sourcing has already moved from searching static databases to using social media, and this trend will continue to grow. Rather than build proprietary databases or talent pools, recruiters can participate in and look for potential candidates in many different online forums and communities. As almost all professionals have an online presence, whether in LinkedIn or Facebook or elsewhere, and as many are also likely participating in Twitter chats, Facebook conversations, and so on. Searching for talented people is getting easier each month.

A recruiter can find an interesting potential candidate, start a conversation, provide the candidate with a variety of information sources about the organization and position, and even direct the candidate to screening apps and apps that allow the candidate to apply.

Recruiters can also use their network of current employees, alumni, friends, and colleagues to crowdsource good candidates and leverage referrals.

Entire recruiting campaigns can be run in a matter of days or weeks by using referrals, crowdsourcing, social media, mobile technologies, and by rethinking the recruitment process. Through streamlining, simplification and by getting hiring managers more involved, candidates can be found, screened, assessed, and hired in days.

Continued Rise of Contingent Workers

The use of contractors, part-time employees, and consultants has soared during the recession. And it will continue to grow for two reasons: the first is that it provides employers with the flexibility they seek to manage costs and headcount easily and much more cheaply than by frequent layoffs. Second, many people are finding that contingent employment suits their lifestyle and interests well. They can plan other activities around their work schedules, they can budget according to the amount of time they are willing to work, and they get variety in the kind of work they do and who they work for.

It will be hard to return to the model of employment where just about everyone is a regular employee. Strategies changes frequently, world events and business cycles make it necessary to adjust priorities more often than ever before, and people are less and less willing to commit to a long-term employment arrangement that is uncertain and stressful.

The Beginning of Applied Analytics

Look for more vendors to offer analytical software specifically for human resources and recruiting. We will begin to see how various independent events have an effect on the quality of hire by tapping into data hidden away in their ATS and HRIS systems. They will begin to seriously track and use data to decide the best sources of candidates, what key traits lead to retention and on-the-job success, and where they can reduce costs or efforts and still get good results.

All in all, the economy and the election will dominate this year and, as a result, this should be a year of modest employment growth, a focus on hiring returning military veterans, and even more growth in outsourcing volume recruiting and hard-to-fill positions to RPOs.

Companies need to make strategic decisions to outsource functions of their business that are not part of their core competencies. One such function is Contingent Workforce management; managing this function is a extremely complex, and organizations rarely have the capabilities to do it effectively. Deciding whether to outsource or internally manage contingent labour is highly dependent on the specific organization’s capabilities; however, outsourcing is often a better option.

When should you manage internally? If your organization has a strong talent acquisition function, cooperation between HR and procurement, cooperation between HR and other lines of business, and strong organizational leadership, then managing contingent labour internally is something your organization should consider.

To manage its contingent labour in an efficient and cost effective way, it is important that your organization possess all of these attributes, and not merely a few. Contingent labour often accounts for organizations largest single line item cost, and internally managed contingent labour programs are also often run in an ad-hoc, inefficient manner, and so organizations need to carefully examine their capabilities before deciding to manage internally.

If your organization does not possess the necessary attributes, an externally managed Contingent Labour Program, or MSP, is the best option. An MSP provider has the skills and knowledge to ensure compliance with the tax and employment law, which mitigates your risk.

To find out more about how your organization can benefit from an MSP program, click here or contact:

Christina Fabugais
Marketing Manager
Contingent Workforce Solutions Inc.
Direct Phone:  416-642-9077
Toll Free:  1-866-837-8630 x9077

ADP, best known by the adjective “payroll processor,” will need to launch a rebranding campaign. Something like, “ADP, the full-service human capital company.”

The $10 billion company announced today it is acquiring The RightThing, a leading recruitment process outsourcer, which three years ago acquired AIRS. Terms of the deal weren’t announced.

It’s the second acquisition for ADP in as many months. In September it bought Asparity Decision Solutions, a supplier of  employee health benefits decision support tools.

Besides giving ADP a strong and immediate presence in the burgeoning RPO business, The RightThing’s AIRS unit brings a sophisticated recruitment technology and a well-regarded recruiter Internet training component.

However, the announcement strongly suggests that it was the RPO side of the house that ADP was after in the acquisition.

“With the addition of The RightThing’s industry-leading RPO services, technology and management team, ADP will not only expand into a strategic adjacent market, but will also immediately become a principal player in the RPO industry,” said Regina Lee, president of ADP’s National Account Services, Major Account Services, GlobalView and ADP Canada business units. “Expansion into complementary markets — such as RPO — will be of great benefit to our clients and is a critical element in our plan to grow our business.

As a privately-owned company, The RightThing does not disclose its financial details. However, when the company acquired AIRS, which reported its 2006 income as $9.1 million, CEO Terry Terhark reported The RightThing was the larger of the two companies. At the time of the sale, AIRS had a staff of 62. The RightThing had about 450 employees.

ADP, which has more than 51,000 workers, has been aggressively pushing into the human capital market for several years. Even though it’s widely known for its payroll processing and benefits administration, ADP has a strong HR technology lineup and services for auto dealers.

At the HR Tech show last week in Las Vegas the company unveiled Vantage, its first full-lifecycle talent suite. Its huge show booth featured its talent management product line.

ADP started building out its HR tech products in 2006, when it bought VirtualEdge, which had a strong talent acquisition system. Over the years, it has added a number of other companies to strengthen its business process outsourcing, as well as to expand its HR tech services. In 2010, it acquired Workscape, giving it a compensation component.

The year before, ADP and Cornerstone OnDemand partnered up with ADP, gaining the rights to license and sell Cornerstone’s talent management suite, which included succession, performance, and learning. Now, Vantage integrates all those components into an HR suite aimed at the enterprise market.

The RightThing acquisition helps ADP fill in one of the few remaining gaps in its obvious quest to be a 360-degree, HR services provider. By its own count, the company already does business with 500,000 companies of all sizes through its payroll and benefits handling arm. That gives it unique access — and intelligence — into the hiring practices of its customers. With The RightThing, ADP can now provide recruitment services of one type or another to even the smallest — or the largest — of employers.

It may seem unlikely in today’s economic climate, but a war for top talent is looming. The recession has given companies the false sense that good people are abundant; however this is will quickly change as the largest segment of the workforce, the baby-boomers, begin to retire en masse. Profit Magazine recently published an article entitled “The Incredible Disappearing Workforce” which details the struggle companies are facing, and will continue to face, with finding suitable replacements for their retiring employees.

Profit Magazine states that “the boomer wave is so big that no combination of measures can replace all of the retiring workers”[1], which indicates that companies need to get resourceful in their search and retention strategies for top talent. One way to do this is through contract work. Many older boomers have indicated that they are eager to return to work; however they are not eager to return to 60-hour work weeks, having employees report to them, and moving up the corporate ladder[2]. Instead, they want to work as individual contributors[3]. Contract work provides the perfect opportunity for retired or soon-to-retire to do this. The statistics already show that this trend is occurring, and it will continue to increase in the coming years[4].

Companies need to prepare themselves for uncertain labour conditions, and, as contract labour continues to rise with this trend, companies will require assistance with managing their contract labour. Aberdeen Group’s comprehensive study of Contingent Labour Management indicates that 50% of enterprises need to better manage all facets of contingent labour[5].

Already, best-in-class companies are 35% more likely than industry average companies to use a Managed Service Provider solution for their contract workforce needs, and 63% of best-in-class companies are using a Vendor Management System[6]. This trend will likely continue as organizations hire more contract baby boomers.

In order to remain competitive when top talent is difficult to find, organizations need to be resourceful when recruiting and retaining experienced workers. Using a Managed Service Provider that focuses on managing contingent workers allows companies to develop and implement strong alumni and retiree programs, and keep sought after knowledge and experience for longer.

[1] McElgunn, Jim. The Incredible Disappearing Workforce. Profit Magazine. Oct 2011

[2] McElgunn, Jim. The Incredible Disappearing Workforce. Profit Magazine. Oct 2011

[3] McElgunn, Jim. The Incredible Disappearing Workforce. Profit Magazine. Oct 2011

[4] Orler, Elain. Managing Contingent Labour. Human Resources Executive Online. Sept 2 2011.

[5] Dwyer, Christopher, J. Contingent Labor Management: Strategies for Managing the Complexities of the Contingent Labor Umbrella. Aberdeen Group. June 2010

[6] Dwyer, Christopher, J. Contingent Labor Management: Strategies for Managing the Complexities of the Contingent Labor Umbrella. Aberdeen Group. June 2010

Doing less with more. We measure it. Monitor it. Optimize it. Benchmark it. Roll it. So many schools of thought channeling through webinars, blogs, SMS feeds, etc. assail the minds of talent acquisition leaders daily. It can be hard to take the time to process it all, let alone roll out a custom implementation when what is really needed today is a purple squirrel with an engineering degree willing to relocate for less money. Late nights at the office resuscitated the question, “Can we get back some of the time we spent executing necessary, yet time-consuming transactional activities and reallocate the team’s time to more strategic client-facing initiatives and management’s time to taking care of the team?”

I approached this conundrum earlier in my career with the help of my talent acquisition team at that time. As we began an examination our own processes, we tried to keep a “lean-esque” perspective on what we see is the incremental value recognized through individual process steps. The central challenge became whether we could change the way in which something is executed, while still retaining (or increasing) its incremental value. Ultimately, can we do it quicker, cheaper, and not cannibalize our effectiveness and efficiency?

After mapping our processes, we determined posting jobs was a laborious task that had 1.5 FTEs committing their college-educated minds (and a fraction of the P&L) to data entry. We were posting to local boards, niche sites, contracted megaboards, etc. We began looking to see who could do this for us and liberate the recruiters to function in other capacities day in and day out.

Abandoning our nature to be risk adverse, we took a page from mental giants in the manufacturing industry and began a trystorming prototype process. Our path to enlightenment routed us to an India-based company that could provide us with a very fiscally responsible service through its dedicated and scalable client service teams. During our relationship, we realized a few things:

  1. The cost of posting jobs was materially lower due to less-expensive partner labor hours being used as opposed to our team paid at a higher wage and payroll burden rate.
  2. We reduced by 2/3 the time we spent on posting activities, enabling team members to begin some special projects.
  3. Their newfound freedom mitigated their “attrition through boredom.”
  4. Our reservation about whether the vendor could deliver to our client’s expectations since they were not part of our organization was quickly pacified by their timely communications whether by email, phone, and/or IM.
  5. We had enhanced financial scalability since we paid only for the hours, leveling the ebbs and flows of our client needs.
  6. It offered an optional prepaid monthly fee arrangement. Historically, each time we wanted to post to a board only one time, we would buy the individual ads and later provide a month-end reconciliation against cost centers. Under the pre-pay model, we paid a fixed fee at the beginning of the month and simply sent each job description with job board destination. Operating as a declining balance and supported by emailed receipts and monthly reports enabled an internal control mechanism self-monitoring our current month’s job board expenditures.

Once our process was optimized and rolling, we began to dig into more services it offered to see if there was other value that either we could change in our existing practices or add to enhance our departmental offering. To our pleasure, the vendor was able to take a prescribed list of key skills needed per position, review incoming candidates, and tag in our ATS which ones meet the criteria. It also offered to source active, qualified candidates who have resumes online and send an invite to apply to the ATS. We could smell the cost savings–so long as the quality was there, of course.

Finally, we were limited in supporting our recruiting needs globally by having a monolingual team. The vendor with a more linguistically trained workforce was poised to provide postings in other countries in the language necessary to attract and engage the right talent.

In summary, our relationship with our new partner enabled our team to act more strategically and spend less time downing our office coffee. Our blended mix of transactional execution enabled the recruiting team more time to be client-facing and positioned management to able to giving back care to the recruiting team members by focusing on individualized growth-related talent-management activities.

As the years have rolled by I have become increasingly aware of how poorly internal recruiting functions perform when compared to recruitment process outsourcing organizations or agencies. These have to make a profit or go out of business. They have to operate efficiently and continue to innovate and stay ahead of the demands or questions that clients will have.

Internal functions don’t have to do any of these things. They are entrenched in almost all organizations, and because their function is perceived as incidental to overall organizational performance or success, not much in the way of efficiency is really expected or, unfortunately, rewarded. This means that few recruiting leaders have any incentive to improve their function. In fact, doing so may mean a smaller budget, less headcount, and even less status.

So this leads to the headline question: Do we need an internal function at all? Does it do something that an external provider cannot do? Can it do it at least as cheap or as fast? Can it provide a higher-caliber candidate?

Some thoughts:

  1. Internal recruiters who are employees should have one major advantage over any external provider. That is a deep knowledge of the corporate culture and what success criteria are, and also what individual managers are looking for in candidates. The deeper and more scientific this knowledge is, the more it can be repeated, refined, and taught to others. A really outstanding internal function would nurture and develop a core of highly knowledgeable and trained recruiters who would have this knowledge. HP, in the old days, and IBM today, have this kind of built-in DNA that is very hard to replicate. External functions will always have difficulty achieving this level of intimacy with their clients, even when co-located, primarily because their employees have less motivation to invest in gathering this information and may be interchanged frequently. This is one area where length of service and commitment to the culture can pay dividends.
  2. To remain competitive with outside providers, an internal function has to be as efficient as or more efficient than an outside provider. This means constantly improving operational excellence, adding appropriate technology, providing detailed market information and coaching to hiring managers, and building a reputation for adding real value through the quality of talent it provides. I have never seen this in any client or organization I have worked in, and I think this is the area of greatest potential return. Internal functions are never very efficient, primarily because leadership is transitory: I am not sure of the average tenure of a recruiting leader, but I would guess it is less than three years. This means there is little to no continuity of planning, no oversight of process improvements, and little opportunity to choose, install, learn and refine technology. Most organizations I have worked with change processes, procedures, and technology with each leader who arrives. Plans that have taken months to create are thrown away overnight. Recruiters know that they can do what they want, for the most part, because there will be no accountability or continuity. This is the area where an external provider, with a profit motive and an efficiency goal, can beat an internal function hands down.
  3. Recruiters also need to be retained, trained, and incentivized to perform. External agencies can offer commissions, bonuses, and other rewards for outstanding performance. They can fire inefficient or incapable recruiters quickly. Internal functions are usually tied to traditional reward structures that do not provide the shorter term, efficiency-based rewards that would be more effective. A recruiter can barely perform at all and survive (and even thrive) by courting a few hiring managers or by being a good bureaucrat. And employment laws and internal practices limit when and how a recruiter can be fired, and the process is lengthy. Again, it is essential that internal recruiters be selected carefully based in skills and motivation and offered whatever incentives are available to encourage short and long term performance as well as retention.
  4. The emerging prominence of social media should offer internal functions hope. Social media inherently dependent on intimate knowledge about the firm, candid communication, and the ability to take advantage of the networks of current employees. All of these give internal functions an edge.

Yet I am not convinced that this will make much difference. The RPOs and agencies are rapidly adopting social media and are even offering to manage the talent communities of individual firms. Many medium or small firms are not even looking at social media as a recruiting channel, and larger firms have widely divergent opinions and practices.

Effective social media use requires time and dedicated people who can interact with candidates, generate content, provide advice, and screen candidates for individual jobs. These are all strengths that internal recruiters have if they are given the time and charter to do so. Unfortunately again, corporate policy, management’s inability to see the benefits of social media, the fear of litigation, and lack of staff depth usually means this does not happen.

Given the state of recruiting functions today there are few compelling factors to recommend retaining an internal function. I have outlined where they could gain advantage, and a handful are doing these things, but by and large they offer little that would make them indispensible. By negotiating tough performance-based outsourcing agreements and allowing outside recruiters access to hiring managers, firms could eliminate the administrative and benefits costs of retaining employee-recruiters and the function could be reduced to a few liaison folks and vendor managers.

Even though we are in an economic down cycle and unemployment in the U.S. is hovering around 10%, recruiters are still struggling to find people with the skills and experience their hiring managers are looking for.

Pipeline im BauPartly this is driven by the commonly held assumption that these skilled and experienced people have been affected by the recession and are actually in the job market. Recruiters know this is not the case and that many candidates have become even more difficult to find and entice away from a secure position.

While demand for lesser-experienced, educated, and skilled candidates has slacked, it has risen for those with higher-level skills. Many firms are trying to replace the employees they had with moderate skills or who were in learning roles, with people already accomplished in their profession.

This is a poor time to be an apprentice or a mid-level worker, as the focus is on paying a bit more for people with better skills who are more capable of achieving goals with minimal help right away.

This has put a huge burden on recruiters. It has increased the number of searches needed for the hard-to-find candidates while almost eliminating the need to source for the easier-to-find positions. This, in turn, has driven recruiting leaders to take a hard look at developing specialized internal sourcing functions or finding an outside firm or individuals to do it for them.

Things to Consider

Before deciding whether to keep sourcing inside or find an external provider, a recruiting leader needs to make sure they have answered three questions carefully: (1) is there a sufficient volume of need that will last over some period of time to justify focused sourcing, (2) do you need to simply have the names and contact information of potential candidates so that a recruiter can screen and assess them, or do you also need screening and assessment or even more than that, and (3) do you have the internal staff with the capability, knowledge, and bandwidth to be effective?

If there is an ongoing need and you lack staff, looking at an outsourcing provider might be both time and cost effective. Building an internal sourcing capability can take months of training in addition to the time needed to find recruiters with the needed skills. Many firms turn to contractors for this service, and that may make sense. Contractors are often local, may be very familiar with your organization and both its culture and skill needs, and work for a reasonable fee. However, they also often increase the leader’s workload significantly.

When sourcing needs are high, timelines are short, needs varied and changing, and the skills hard to find locally, then other solutions may be better.

What Kind of Outsourcing Do You Need?

There are three types of outsourcing:

  1. Generating names of potential candidates, often called research, which results in a list of names and contact information. These may turn out to be viable candidates, but many will not. All screening and assessment is made by internal recruiters and hiring managers. Results are most likely measured by how many names were generated, how quickly it was done, and how closely they met the previously-agreed-to specifications.
  2. Generating names and then screening and assessing them. This usually means that only candidates who meet certain qualifications are presented. Results are measured by how many qualified candidates are presented and by the speed with which this takes place.
  3. An emerging type of sourcing involves all of the above but also includes developing and managing a proprietary talent community of qualified candidates. This might include frequent communication with candidates, setting up and maintaining a Facebook page or something similar, and providing a means for internal recruiters and perhaps hiring managers to communicate with candidates.

Tips for Outsourcing Success

Clarity and Transparency: You need to have a clear strategy that outlines how sourcing fits into your overall success, where it is most needed, and be very open about why you are seeking an outside source.

Know which of the three types of outsourcing above you are primarily interested in: Obviously that choice will affect which outsource partner to use and will impact what level of relationship you need to have. Names generation can be performed by individual contractors and they can be located almost anywhere. The major choice criteria are ability to find the people you are looking for and the speed they can do it. Other sourcing arrangements are more complex; often need face-to-face contact at some point; and require a more sophisticated level of negotiation.

Choose an appropriate partner: Many times I see recruiting leaders choosing outsourcing partners without full knowledge of how deep their skills go or what their previous clients thought about them. You need to get references, spend time making sure their expertise matches your needs, and perhaps even start with a trial to see how they perform. You also need to make sure they can grow with your needs and fit your corporate culture.

Define your service level expectations: Work with your outsourcing partners to write down a set of expected performance levels, including time to find candidates, how many need to be presented, and what constitutes quality. Defining what a quality candidate is often becomes the most difficult aspect of a relationship. Take the time to be sure the definition is clear and how it will be measured is agreed to by the hiring manager, the outsourcing provider, and yourself.

Establish a vendor relationship manager: Relationships don’t just happen, and they are far more than a contract. Good communication, access to hiring managers when needed, and a willingness to negotiate through difficult issues are necessary components of any successful relationship.

Having a single person who acts as the account manager with the outsource provider is the best way to begin building a long-term-success model. When I speak with parties to failed outsourcing arrangements, lack of communication and difficulty to get issues resolved are significant factors.

Develop conflict resolution processes: Be sure to set up some informal and formal ways for conflicts, disagreements, and uncertainties to be addressed. This can be through the vendor relationship manager or through a committee or other body that is set up to deal with conflicts. The more defined this process is, the better it will be. It should answer questions such as: when is a conflict at the level of needed more formal resolution, how is a complaint raised, and whose decision is final.

Allow access to hiring managers and other key employees: Make sure you allow an appropriate level of direct interaction between the outsource team and the hiring managers. After all, the goal should be finding and placing a quality candidate, not about internal power struggles and politics.

There are many success stories, and all of them are because these basic steps were followed.

"iGATE Corporation (NASDAQ: IGTE), the first Business Outcomes based integrated technology and operations company, today announced that its subsidiaries have executed definitive agreements to acquire a majority stake in Patni Computer Systems Ltd. (NSE: PATNI, NYSE: PTI), the Mumbai-based IT services and BPO company. The transaction is valued at approximately $1.22 billion, including the mandatory open offer to the public shareholders of Patni. The transaction is expected to be completed in the first half of 2011. iGATE expects the transaction to be accretive by 2012 on a cash earnings per share basis. "

— Excerpt from iGate press release, January 10, 2011

Now that the acquisition has been announced, it is expected that current Patni customers will be cautious and concerned, but it would be unwise to assume that they are ready to switch vendors. The reality is, application development and maintenance (ADM) transitions are not easy, they have the potential to cause a lot of disruption, and are more likely to impact the client’s end customers. In addition, client current priorities are focused on new technologies and keeping pace with their industries. If they are happy with their existing relationship they won’t divert the attention needed to switch out the vendor due to an acquisition. Besides, acquisitions in the tech space are more common these days. Our research shows that Sourcing & Vendor Management Professionals are better prepared to articulate their concerns and expectations to the acquiring firms. They are less likely to switch vendors today, due to an acquisition, than they were 5-7 years ago.

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John Smith began 2010 with the hope that hiring would ramp up slowly over the year and that he would be able to re-establish his crackerjack sourcing team that was eliminated in 2009. He believed that sourcing passive candidates off the Internet would provide enough candidates, with very little need for job postings or agency involvement.

Instead, he found that hiring in some niche areas greatly exceeded his expectations, but that overall, hiring was slow. The slew of candidates just applying for anything grew all year, swamping his team’s ability to evaluate and respond to each candidate. But at the same time, the candidates he desperately needed were not among them. Internet searching turned up a few candidates, as did employee referrals, but there were many unfilled requisitions as 2010 came to a close.

As he crafted his plans for 2011, he pondered the use of social media, which they had only dabbled in and not very successfully in 2010, and well as whether he really needed his sourcing team — at least as it had been designed with a heavy emphasis on Internet sourcing of passive candidates.

If this story rings true to you, here are some ideas on what 2011 may bring. And, some strategies that be effective as we continue to evolve sophisticated sourcing methods and better online tools.

Hiring Situation

There will be no hiring boom or any return to the pre-2009 years. 2011 will be another year where demand for highly experienced and skilled technical experts will continue to grow, as will the need for people with global experience. Demand will drive more global recruiting efforts, and more work will move to wherever the skills are. This means that knowing how to recruit in Central Europe, India, China, and Brazil will outstrip most organizations’ capabilities. It will drive the need to set up remote sourcing teams or find people locally who can source in those countries and regions.

Mid-level hiring will remain slow, and there will be few additions to support or administrative staff. Much of this hiring will be outsourced to RPOs and agencies that specialize in specific areas. The demand for workers with minimal skills will shrink even further as technology replaces them. Many organizations have already replaced receptionists with automated sign-in systems and automatic call systems. Accounting and bookkeeping systems are using OCR to automatically input receipts and other data into their systems.

The bottom line is clear: recruiting internally will be focused on hard-to-fill, business-critical positions, and if the internal function cannot meet the needs, external agencies and RPOs will be called in.


RPO will continue to grow as a service with more sophisticated approaches and more technology. Some firms will focus on specific regions or on functional verticals. These RPOs will invest the time and conduct research that will help them build large communities of candidates with narrow, deep expertise. They will do this cheaper and better than a corporate recruiter can because of dedicated resources and investment in technology. Corporate recruiting functions need to build better ways to assess RPO firms, establish firm performance criteria, and negotiate contracts based on how well your needs are met, rather than on cost.

Talent Management

I have long advocated that every organization should increase its focus on developing a holistic and integrated approach to talent. That will begin to happen in earnest this year. Every major survey, including those from Pricewaterhouse Coopers and the Boston Consulting Group, indicate that CEOs are now relentlessly focused on getting better people in their organizations are are willing to put the resources in place to make it happen.

Critical positions need to be clearly identified, and there should be a plan as to how those positions will be filled. The plans should rely on a mixture of internal promotions/transfer as well as external placement. Development should be a key component and lead to a percentage of positions being filled by newly trained internal candidates. Entry-level hiring can feed this pool, as long as development and assessment are in place. Rigorous performance assessment in real time as well as feedback to recruiting on success traits are also important parts of a successful talent management plan.

Employment Brand

Building a believable and vigorous brand will consume more time and resources than it did in 2010. A recruiting website will be much less critical, although still important, to success. It will be more important to use a variety of marketing tools, including targeted marketing, Twitter, and Facebook, as well as LinkedIn, to interest more people in learning about your organization and opportunities.

Global brand building will be essential for firms looking for global talent. Qualified people in many countries identify closely with the brand of the firm they work for. If your firm has no brand, is not well known, and does have an attractive product/service offering,recruiting will be very difficult, given the competition. That is why the focus should be on identifying your uniqueness and on developing a marketing campaign to emphasize it and use it to find key talent.

Internal Sourcing Teams

Internal sourcing teams will morph from a focus on Internet search, which will remain a small part of the process, to a major focus on social media. The purpose of the sourcing team will be to ensure a supply of interested people who can be turned into candidates by a combination of skilled recruiter involvement and sophisticated marketing tools. These teams will be small, technically highly skilled, and capable of being community managers, marketers, and expert in identifying and assessing key candidates virtually.

Social Media

In every way, the backbone of the recruiting function will be its ability to use social media — the tools that connect and engage millions of potential candidates. Their success will be in how effective they are in convincing people to take part in the sub-communities that they create for their firms. This will require a strategy that has been carefully thought out and is revisited constantly and updated as its effectiveness is evaluated.

Whether they use Facebook, Hyves, LinkedIn, or another community is immaterial. What matters is that the community they choose attracts the kind of people they need. New smaller specialist communities may arise over the next year, and staying abreast of these, or even creating them, may make the difference between success and failure.

In light of this, John may want to rethink his priorities and spend time to really strategize about what the needs of this organization will be and where he needs to put his resources.

In many ways 2011 will look a lot like 2010 but with more focus on implementing the initiatives that were started in 2010 and in being realistic about the use of RPO, outsourcing, and the need to focus on critical positions.