Sarah Bridge
reports that
hiring key staff is
becoming an
international affair
T
he phrase "think global, act
local" has a good claim to be
the unofficial motto of
internationalrecruitmentout-
sourcing, but in a time of
globaleconomic downturnthe
industry is having to prove that the
benefits of outsourcing recruitment
needs on a local level also apply across
national boundaries.
The conviction that a multinational
corporation can outsource its recruit-
mentprocess tojustonecompany isthe
big idea that underpins the global RO
market. Not only do providers of RO
(also known as RPO, recruitment proc-
ess outsourcing) promise the cost sav-
ings, efficiencies and transparencies for
their clients that they would provide in
a single market, but they claim to have
the knowledge to navigate global varia-
tionsinemploymentlegislation,cultur-
al issues and working practices -- and
successfully target the local talent.
Craig Julien is director of global RO
product management and marketing
for Kenexa, which has branches in 18
countries and recruits in 40 countries.
With the financial pages dominated by
news of mass redundancies, he says
that "the US and other markets have
beenaffected by the economic situation
but companies still have to hire the
right people, even in a downturn. RO
has the capacity for recruiting in differ-
ent climates because the recruitment is
becoming more specialised and there is
always going to be a level of attrition.
Positionsthatweredifficulttofillyester-
day are still difficult to fill today".
Julien says he hasn't yet seen any
indication that recruitment is being
brought back in-house as a result of the
downturn -- and possibly the reverse is
happening. "If companies are having to
shed costs, then they are wondering
whether they can justify maintaining
their recruitment function in-house,"
he says. "If RO can manage recruitment
capacity then it raises the question of
why people should still own it if they
don't have a business reason."
The credit crunch may, then, be good
for business -- if it's the RO business.
Paul Mallinson, UK and Ireland manag-
ing director of Hays Resource Manage-
ment, says: "The downturn is a driving
forcebehindRObecauseglobalorganisa-
tions with a large recruitment base are
now wanting to see clearly how much
they are spending on recruitment.
"Large organisations are more seri-
ously looking at RO as a way to give a
higher visibility of what are their key
costs. Our sales pipeline has never been
stronger."
Just how well are ROs delivering the
benefits of a global service? With the
rise of globalisation has come the rise of
the idea of the global recruiter. Interna-
tionalbrands suchas Microsoft,Unilev-
er, Thomas Cook and BT have signed
multi-million-pound contracts to help
them meet their staffing needs around
the world.
The market is certainly growing: a
report on RO opportunities, published
inMaybytheindependentanalystData-
monitor, estimated that the global mar-
ket was worth $720m (�470m) in 2007
and forecast that it would grow 22% to
$880m (�575m) this year. In 2009, Data-
monitor predicted, it would be a
$1 billion (�653m) industry.
The report found that RO demand
was coming mainly from Fortune 1000
companies in America. But it also
showed that the markets in the UK and
continentalEuropeweregrowingrapid-
ly and a similar pattern was emerging
in the Asia-Pacific region.
Whilethe industry has been expand-
ing swiftly, RO companies do not yet
have the ability to offer a truly interna-
tional solution by themselves, accord-
ing to Datamonitor. They are, though,
able to deliver across the globe by split-
tingcontracts into regions andbetween
different vendors
The report is clear on this: "The one-
vendor global deal has not arrived yet,
but a number of vendors believe that a
breakthrough will occur in the next 12
months. The key reason for the break-
up of global contracts has been the fact
that vendors do not have the capabili-
ties to deliver on an international
basis."
ManyROproviderswithglobalambi-
tions are investing in international
expansion -- acquiring companies,
building a global set of processes and
forming partnerships with vendors in
other regions. This year saw a wave of
mergers and acquisitions as providers
beganenlargingtheirexpertiseandgeo-
graphical footprint.
Mallinson agrees that RO is yet to
become truly international. "Global RO
is an emerging market, rather than an
actual market at the moment," he says.
"Conceptually it's there and it's a mar-
ket opportunity, but companies have
yet to establish a consistent approach
across the globe."
Ideas about what RO involves differ
across the regions -- EMEA (Europe,
Middle East and Africa), the Americas
and Asia-Pacific -- which makes it hard
for one operator to provide a common
service, says Mallinson.
This is reflected in the big businesses
using RO providers. "The issue is about
setting up an infrastructure of process-
es and people," he says. "A lot of client
organisations themselves aren't truly
global. They have a global presence but
they're run by independent regions
which have autonomy.
"Very few organisations make truly
global decisions, so it's more true to say
that a global organisation may have
three different partners in three differ-
ent territories."
MartinReddington,ahumanresourc-
es expert who recently co-edited a book
called Technology, Outsourcing and
Transforming HR, says that the attrac-
tions of global RO are often perceived to
lie in a number of areas. These are:
"Enhancing focus; the benefits of scale
and scope, often supported by superior
technology; dedicated skills and
management; reduction in overhead
costs; and better operational data,
including visibility in areas such as
legal compliance."
However, he warns, there can be
insufficient analysis of the strategic
optionsavailableandtheirrelativemer-
its, which may lead to long contracts
being entered into without sufficient
thought as to what could happen if, for
example, market conditions change.
"The decision to enter into a global
RO agreement must be taken only after
very serious thought and due diligence,
otherwisewhatappearedtobeanattrac-
Mapping out a
global strategy
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