Hire Power

Sydney Morning Herald, October 1 2005

The outsourcing of recruitment is not over - but the process is being reinvented, writes Wendy Taylor.

Outsourcing hasn't always lived up to expectations. In some cases, it has failed to deliver the faster, cheaper and more flexible services promised.

In other cases, it has exposed organizations to more serious risks, sich as a loss of intellectual property, a reduced capacity to adapt to market changes or breaches of data confidentiality.

A global study by Deloitte Consulting released in April examined the experiences of executives managing outsourced functions n some of the world's largest organizations. In addition to reporting a string of problems and disappointments, Deloitte Consulting declared that a swing away from outsourcing has begun. Many larger companies were bringing functions back in-house where they could be better controlled and managed more simply.

However, this turnaround doesn't necessarily signal a return to the traditional model of a permanent in-house team- pr the demise of outsourcing. Rather, the study found corporations were exploring new outsourcing models that overcome the shortcomings of the off-site model.

Recruitment companies in Australia, which have thrived under a sustained wave of outsourcing of recruitment over the past 15 years, are seeing similar trends emerge.

Many recruitment companies are finding their contracts with larger companies weakening.

Fiona Shields is general manager at PageUp, an Australian developer and provider of online recruitment software, whose target market is Australia's largest 100 companies. Its clients include the largest employer, Coles Myer. She says there has been a "significant swing" back to in-house recruitment.

Shields, who was general manager of recruitment at Optus before joining PageUp, says cost and new technology are two factors driving this shift.

For example, new online software has automated recruitment grunt work, such as screening resumes, making it much easier and quicker for companies to manage large volumes of applications.

In recent years, discussions of how to best manage recruitment have been influenced by factors other than time and money. "Because of the perceived talent shortage, employers are wanting to build and manage their own talent pool, build their own brand and position themselves as employers of choice," Shields says.

"Rather than be reactive when they have a role to be filled and say [to an agency], 'Who have you got? Send me some people to be interviewed', they are saying, 'Let's always be looking for people in hard-to-fill positions. Let's always be interviewing. Let's always be keeping candidates warm, so that when a vacancy comes up we will have someone who is in our talent pool who we have been keeping in touch with.'"

However, agencies still have a role to play in the recruitment process. A new model increasingly used by large employers is 'in-house recruitment outsourcing', Shields says. In this model, an external service provider is contracted to run the recruitment onsite, usually under the host company's brand.

A model that is gaining popularity in Europe and has been implemented locally by Alexander Mann Solutions takes this model several steps further.

In the Recruitment Process Outsourcing model, which ANZ and Westpac have adopted, Alexander Mann Solutions is contracted to provide the entire recruitment function on-site under the ANZ and Westpac brands.

"It is different from other models because it looks at the entire life cycle of outsourcing," says Tracey Cooper, Asia-Pacific managing director at Alexander Mann Solutions. "It's about bringing people in, moving people around and moving people out of the organization."

As well as external hiring, teams working according to this model manage internal recruitment, secondments, outplacement and may co-ordinate graduate recruitment.