By Martin Conboy, President – Australian BPO Association (ABPOA)

Australia will have most of the big engineering infrastructure projects in the global oil and gas industry during the next ten years. This represents up to 75 per cent of all projects, and that is really going to stretch our capacity to attract the volume of people required.

Media reports suggest that there is a shortage of over 20,000 professional engineers, and that number will only grow as a result of the rampant demand from the Australian mining and resources boom.

Engineering companies in the oil and gas, mining, consultancy and infrastructure are the firms that most need to attract and retain skilled workers.

Even the fact that Australia’s universities are producing more mining engineering graduates each year, it is still only half of what the industry needs. First year salaries are $100,000 plus allowances and the employment rate is 100 per cent.

Because of the labour shortage, some mining companies are increasing automation and are having the processes monitored from other locations. It should not be long before some clever outsourcing companies spot this opportunity.

A whole new outsourcing market has sprung up with recruitment companies actively targeting skilled migrants in the UK, Ireland, South Africa and India, and some engineering companies are outsourcing or offshoring project management, design and fabrication projects to New Zealand in order to connect with skilled labour.

In a classic case of BPO 1.0, New Zealand has a good supply of engineering skills and lower labour costs amplified by the strong Australian dollar and flexible work packages. Apart from addressing the work that needs to be done, it also translates into 30 per cent savings on labour.

As a mechanism to fill the recruitment pipeline, savvy recruitment companies are using Philippine-based resume harvesters to target potential recruits efficiently and cost effectively.

Engineering companies moving to this type of back office delivery model and implementing proven, effective processes via progressive forward thinking, recruitment companies can expect business benefits beyond cost reduction. Recruitment-related business process outsourcing could help recruitment performance, lower operating costs, and increase the size of the available pool of talent.

With ultra competitive strategies required to identify talent quickly, using skilled and inexpensive Asian-based resume harvesters is an eloquent solution. This model can also help create competitive advantage for engineering companies by predicting and fulfilling labour force needs and aligning talent plans.

Not only can this reduce recruitment lead times and costs, but it can also ensure a broader reach and consistent service experience regardless of geography, as it provides a process outline for candidate identification and recruitment administration, which can then be used across all geographies.

By Mark Atterby – Senior Staff Writer

Traditionally RPO (Recruitment Process Outsourcing) has been used to improve quality and reduce costs in the recruitment of permanent staff. Recruitment of the contingent workforce was never given the same the level of attention. Today, according to research from the Everest Group, organisations need to adopt a total acquisition approach, where permanent and contingent recruitment are all part of a single integrated hiring program.

The Recruitment Process Outsourcer is a lot different from the other service providers such as contingency search firms, staffing agencies and retained search providers in dealing with the entire recruitment process. The RPO provider is entirely responsible for the methods utilised and conducting the entire recruitment process and the outcomes of the process.

The Recruitment Process Outsourcing Association defines RPO as follows: “When a provider acts as a company’s internal recruitment function for a portion or all of its jobs. RPO providers manage the entire recruiting/hiring process from job profiling through the onboarding of new hires, including staff, technology, method and reporting. A properly managed RPO will improve a company’s time to hire, increase the quality of the candidate pool, provide verifiable metrics, reduce cost and improve governmental compliance”
Kimberley Hubble the Executive General Manager – RPO at Hudson Recruitment, comments,” At first cost reduction was the primary motivation for adopting an RPO solution. Though cost is still important, the key thing they want now though is flexibility and scalability. This was demonstrated during the economic recovery following the global financial crisis. As business started investing again and consumer demand was expanding, organisations needed to rapidly take on more staff. RPO solutions offer the flexibility to scale quickly without having to invest in the substantial recruitment resources. ”

According to the Everest research report, Rise of Blended RPO, the outsourcing and management of both contingent and permanent hiring requirements, has largely followed a silo-based approach. The report highlights however, that by adopting a blended approach, that combines both contingent and permanent hiring requirements into a single program, organisations can achieve significant benefits.

“The initial focus of RPO was on full time recruitement, particularly in areas where people with a higher skill or expertise level were required. But gradually RPO is moving more and more into other recruitment categories”, says Kimberley Hubble.

“Given the current state of the equity markets and the uncertainty because of the European contagion, we are seeing many publicly traded businesses across the region who are looking for a scalable/flexible RPO solution that lowers their operating costs in low periods of recruiting activity”, commented Andrew Grant, Global Managing Director of Talent2′s Recruitment Managed Services business. He went on to say, “having said that, we are seeing that the blended model for RPO combining the hiring of FTE and contingent workers is definitely on the rise in the UK and Australia. In Asia, only 12% of the workforce is contingent and mostly lowly paid.”

“As organisations are making greater use of contract, casual and part-time labour to meet the fluctuations in demand and general business conditions, a more disciplined approach to contingent recruitment is necessary”, comments Rajesh Ranjan, research director for the Everest Group. Many scarce and high end skills are increasingly likely to be found in contingent workers who are in strong demand.

RPO, over traditional recruitment, offers a range of benefits including economies of scale, economies of scope, cost and flexibility. The Everest report states the following benefits:

Lower costs – 10 – 15 % in savings can be me made on better workforce utilisation with another 7 – 10 % savings on demand management Lower service and vendor management cost.

Greater flexibility – Demand for contingent hire increases over permanent hire during recessions. A single provider for both provides the necessary flexibility to scale one up and the other down as demand requires it. Great accountability and compliance can be achieved by having one provider, where having multiple vendors for different hires hampers the accuracy and timeliness of reports and analytics.

Strategic Impact – Blended RPO results in better alignment of workforce planning to overall business strategy. The contingent workforce is an increasingly important part of the organisation. With human capital becoming the key competitive differentiator and an increasing part of this resident in the contingent labour pool, the companies that can successfully tap into it have a competitive advantage.

Regardless of the advantages and the increasing spread of blended RPO the report highlights that there a number of challenges limiting its adoption. HR normally handles permanent recruitment where procurement manages the contingent workforce. The different areas of recruitment are managed in silos within the organisation, requiring buy in from various stakeholders. Organisations may also be reluctant to concentrating everything into the hands of a single provider.

Each enterprise needs to evaluate its own requirements and understand how an integrated talent acquisition approach will benefit the business and how the challenges will be met.

By Lisa Banks (CIO)

It is predicted that 2012 will be the year when customer relationship management (CRM) software becomes truly customer centric and based on an open, Cloud orientated model, SugarCRM’s country manager has claimed.

Speaking with CIO Australia, Australian country manager, Tony Hughes, said a second generation of CRM tools is set to emerge next year.

“The thing that’s pretty interesting is that CRM is about making the IT environment truly customer centric,” Hughes said.

“There’s a second generation of CRM and people say integrating social media is important to the enterprise.”

Hughes said SugarCRM, which recently acquired iExtensions; the tool that makes CRM software for IBM Lotus Notes users, and has 600 customers in Australia, is predicting 2012 will be a year defined by CRM systems that don’t cause vendor lock-in.

“I don’t think a CIO wants to be forced into a proprietary environment that locks them in,” he said. “They want the flexibility to move it into a computer room or into another vendor’s Cloud environment.”

Hughes said a shift away from ERP systems will mean the role of the CRM will be expanded in 2012, and will take advantage of mobility and real time data.

“I think CRM is going to be more about a presentation environment for any organisation that wants to be customer centric,” he said.

“The problem with ERP systems is that they are inflexible and not at all customer centric, so I think CRM is going to be increasingly about information and providing real time information for mobile workers.”

Follow Lisa Banks on Twitter: @CapricaStar

Follow CIO Australia on Twitter: @CIO_Australia

Join the CIO Australia group on LinkedIn. The group is open to CIOs, IT Directors, COOs, CTOs and senior IT managers.

Written by Alex Wong

Assigning tasks or responsibilities by way of a third party is known as Business Process Outsourcing (BPO). Virtual assistance is now the most popular Business Process Outsourcing there is.

A high level of employment is the reality of a number of countries in more recent times. To compound the issue, research has shown the due to the fact that there has been a great improvement with respect to both technology and health care, that more babies are surviving, people are remaining healthier and living much longer. As such, demands have been increased and it has resulted on a strain on the existing resources of the world’s population.

Unemployment has a lot to do with the fact that the government of their country has to be dealing with limited resources. This limited resources, for the most part, has been caused by the necessary act of them having to cut back on capital expenditure and now leaning more towards revenue expenditure.

The bureaucracy of a number of labour legislations have been rendering it much more difficult for employers to find qualified people to employ at a cost that they can afford to pay them at. As such, a number of companies are opting to use assistant service and/or administrative services that are being run via the computer. Many countries, including first world as well as third world, are going towards internet-based jobs, and as such, there are many assistant service, administrative services as well as business assistants available via the internet.

The great thing about the internet is that it eliminates all boundaries. What this means therefore, is that wherever you live, you can both employ and be employed by persons anywhere in the world. You can receive great service via this means, and it has even been said that there are many persons who work in the virtual assistant service and the administrative services as business assistants are sometimes far more industrious than those person who are sitting in an office.

Most virtual assistants work on their own initiative, and as such, you will not need to spend a lot to time supervising them. In addition, to let a permanent staff member go who is employed in your office is not an easy thing to do, even if they are not performing. This is due to the strict labour laws that exist. This is yet another reason why more and more persons are opting to hire assistant service, and administrative services online. Many employers have concluded that hiring virtual assistants is the way to go if they want to save both time as well as money.

FooBoo has a virtual Assistance service for Recruitment and Staffing companies called RVSA (Recruitment Virtual Support Agents)

Visit: FooBoo RVSA

Source: Business Blogs NZ

By Andrew Grant

The memories from the Global Financial Crisis (GFC) are still fresh in the minds of HR professionals, especially for those who guided their organisations through a lengthy period of change.

Plans were revised and action from businesses was swift. So swift in fact that looking back there is regret in the way it was handled, with 84 per cent of employers in Australia admitting they made too many redundancies and consequently, they now risk stifling the growth of their organisations.

Such unsettling change and restructuring meant HR professionals quickly became centre stage. Now, with economic uncertainty remaining, Australian HR departments and employers are beginning to reflect on the strategies and their effectiveness during the GFC, using the experience to address current problems and build stronger models for the coming years.

Of today’s issues, none are bigger than trust. It forms the backbone of HR/employee relationships and has been eroded with employees freely admitting they’re unsettled. Recent research shows one in three employees plan to leave their current positions as soon as possible.

Such nervousness and doubt inevitably has a huge effect on an organisation. Distrust breeds issues with motivation, and as a knock-on, productivity.

Perversely the solution to such an internal problem may lie externally. Outsourcing has long been viewed as a cost-cutting response to events such as the GFC, but increasingly it’s acting as a strategic solution for business, too.

A recent survey from Talent2 into the current state of the HR industry across Asia Pacific reflects this thinking, with businesses turning to outsourcing. Currently, 80 – 90 per cent of HR executives across the Asia-Pacific region are now considering HR outsourcing as a solution to the key challenges cited, including recruitment (64 per cent) and employee retention (50 per cent).

So outsourcing is being touted as a solution, but how does it help?

Tackling motivation or a lack of it, is a two-step process. Demotivating factors must be addressed first, and only then staff can begin to feel the effects of positive initiatives. It is crucial basic employee expectations are consistently met. Whilst no business sets out to pay an employee late, the effects of such an action can cause pronounced and long-term damage.

Outsourcing payroll and other administrative functions ensures an efficient and quality delivery of basic administrative tasks, playing an undervalued and crucial role in satisfying employee expectations. It can also free up in-house HR staff to proactively motivate staff and implement effective strategic talent management programmes.

Along with delivering basic HR expectations, a second key factor in rebuilding motivation and trust with employees is recruitment. Given the economic uncertainty of today, recruitment is down across most sectors and appointments made tend to resonate much further than in prosperous times. Outdated recruitment practices, therefore, risk bringing the wrong candidates in and causing wider ripples of discontent with existing employees.

Bad recruitment can effect engagement, productivity and morale as well as waste investment through the recruitment process.  Nonetheless, outdated methods still reign supreme – recent research suggests only a small minority of employers (6 per cent) evaluate a candidate’s ‘want to’ or motivational ability and potential fit for the role, whereas 62 per cent focus on the ‘know how’ category, undertaking traditional reference checking, resume screening and background interviews.

Such methods mean businesses only scratch the surface using traditional recruitment processes, and therefore are constantly not delivering to their full potential.

One solution lies outside of the organisation. HR professionals are turning to Recruitment Process Outsourcing (RPO) solutions to source talent locally and globally – in fact a recent Talent2/Morgan Stanley report predicts growth in this area to be 25-30 per cent across 2011. Advocates claim that through a larger staff of recruiters, databases of candidate resumes, and investment in recruitment tools and networks, RPO through economies of scale, brings higher quality and reduced costs. For example, RPO solutions typically reduce time to hire by between 20 and 50 per cent and typically reduce costs by 30 per cent (Source: Nelson Hall). Other potential benefits include improved candidate and hiring manager satisfaction and reduced attrition.

In a climate where every hire counts, in addition to RPO organisations are also turning to outsourced assessment services. This comes in three forms, covering psychometric testing (which measures cognitive ability, personality style, emotional intelligence and/or sales potential), simulations and roles (measuring observed behaviour and ability by asking the candidate to perform job and context specific tasks and simulations) and structured interviews (where interview processes for recruitment are designed, trained and delivered).

Such filters help strengthen the evidence on which hiring is based on, protecting against the negative immediate and knock-on effects and poor recruitment policies.

The GFC has acted as a wake-up call for many businesses in Australia and has sparked a huge shift in industry attitudes. Businesses are looking to box cleverer than ever before and an increasing number of HR executives are outsourcing HR functions (or considering doing so) to do this. By returning to square one and building a strong strategic thread which addresses basic principles of HR administration and wider issues like recruitment, there is an opportunity for Australian business to learn from the hard times and rebuild some of the trust lost in the past half decade.

Andrew Grant is the Global MD, Recruitment Managed Services, Hong Kong – Talent 2

IBISWorld

Recruitment was one of the first business processes outsourced by industry and it is tied to the cyclical nature of the business cycle. As an extension we will see growth in employee benefits administration. Australia bypassed the worst of the global financial crisis, which meant its effect on the Australian employment placement services industry was mild compared with its international counterparts.

Australia’s rise in unemployment was small and quickly began to reverse, with demand for employment placement services continuing to grow in 2010-2011 and expected to continue in 2011-2012.

IBISWorld estimates that industry revenue has increased at an average annualised rate of 0.6% during the past five years.

In 2011 the industry is expected to generate $2 billion in revenue, up 4.5% on the year prior. Profit will climb by 4.0% to $59 million.

Following the economic downturn revenue grew 2.2% for 2010-2011.

Despite uncertainty among international global clients and reduced business confidence the employment placement services industry will grow as it anticipates increased demand in permanent recruitment services and an increase in client-paid net fees.

As the Australian economy hits full health industry revenue growth will accelerate to average 2.9% per year over the next five years and is forecast to total $2.3 billion by 2016-17.

That will be driven by increased economic activity, a strengthening labour market and the potential for providing services online.

Industry Outlook

With the Australian economy having held up well amid the global financial crisis and unemployment remaining relatively low growth in the employment placement services industry will continue to strengthen in 2012-13, with revenue forecast to rise by 2.7%.

Although declines in unemployment tend to lag behind growth when an economy is emerging from a downturn the composition of unemployment tends to move more toward people who are switching jobs, while the proportion of people that have been laid off or are long-term unemployed declines.

Continued solid growth is anticipated during the five years through 2016-17 as unemployment gradually decreases. By 2016-17 IBISWorld estimates that industry revenue will reach $2.3 billion.

Job vacancies and new hirings will increase as the economy begins to achieve relatively strong results. Businesses will again turn to employment placement service providers as their recruitment needs expand and the right applicant becomes more difficult to find as competition for workers heats up.

During the five years through 2016-17 industry revenue is forecast to increase at an average annual rate of 2.9%.

Aside from the level of unemployment and general economic conditions other factors driving growth, once the recovery begins it will include the expansion of major operators into new services such as employee process outsourcing and administering WorkCover, superannuation and other compulsory and statutory payments to employees on behalf of clients.

Outsourcing recruitment by business and government will continue. IBISWorld expects profit margins to remain low due to ongoing high levels of industry competition.

After-tax profit is forecast to grow at an average rate of 2.9% per annum to $79.4 million over the five years through 2016-17. Profit will be more volatile than revenue as it comes off a lower base following the downturn.

A strong recovery in profit is expected as margins recover although overall that remains a relatively low margin industry due to its highly competitive nature.

International risks and opportunities

The Australian economy has dodged the worst of the global economic downturn so far but risks of further global financial shocks remain.

When many nations’ governments bailed out financial institutions and increased spending to stimulate their economies the effect was a shift of some private sector debt burden onto government balance sheets.
Many governments were already heavily indebted prior to the crisis and the additional burden, coupled with investors’ reluctance to continue to provide cheap credit, have strained the finances of some nations, particularly Greece, Spain, Italy, Ireland and Portugal.

Any problems in global credit markets will potentially affect Australia’s banks, which are heavily reliant on offshore funding. That may flow through to Australia’s economy and the employment placement services industry.

The industry has a small but growing number of large companies with international links and many small operators, some providing niche services in specialist industries or markets.

Some providers are now critically dependent on government contracts under the Job Services Australia program.

A shake-up of those contracts occurred as part of the transition to Job Services in mid-2009, with some providers losing contracts and others gaining them. That led to office closures and staff lay-offs among those who lost contracts.

It is expected that major domestic operators will expand internationally due to limited revenue growth opportunities in the domestic market.

Further growth opportunities still lie with providing online services to employers and job applicants, and with expanding into providing a totally outsourced human resources service to clients, covering aspects from staff selection to payrolls and claims for Workcover.

Recruitment broker firms that sign up a number of recruitment agencies then offer their databases to client firms are a growing sub-segment in the United States and Australia.

Key Success Factors

IBISWorld identifies 250 Key Success Factors for a business. The most important for this industry are:
Having contacts within key markets: Developing contacts in a wide variety of companies and industries is essential for identifying suitable job candidates.

Ability to communicate and negotiate effectively: Good communication and interpersonal skills combined with industry knowledge are important to retain clients and for interviewing job applicants.
Production of premium services: Maintaining quality staff, service and high client satisfaction levels are important in retaining and attracting clients.

Capacity to objectively assess new investments: Medium and large companies need funds to acquire other companies in the industry.

Effective product promotion: The capacity to present a professional image and to market to appropriate clients is important in attracting and retaining clients.

Access to the latest available and most efficient technology and techniques: It is important for companies to be completely computerised and to have databases containing information on people and clients. The ability for e-mail lodgement of resumes and for clients to access them online is very useful for placing employees.

Production of goods currently favoured by the market: Companies must understand the work environment and culture of clients’ workplaces. Ultimate success will come from continually identifying and selecting the most suitable people for vacant positions.

Source: Smart Company

Posted by: Doug Lubin

With the CWS Summit right around the corner, we’re working hard to prepare our team and yours to get as much value out of the event as possible. With that in mind, while you’re at the show and thinking about what’s new and different, be sure to take a look at the changing landscape of recruitment process outsourcing (RPO).

Here are some themes to keep an eye on:

• Cost is no longer the most important driver of RPO adoption. Like many early iterations of a new business model, cost savings motivates early adoption. However, over time, these businesses must adapt beyond cost to add value and innovation as well as meet market demands. This is where we are with RPO. Clients need more strategic alignment. They’re looking for workforce planning and management platforms, improved metrics, and the potential to expand into new markets and countries.
• Scalability and specialization are much more prominent. The market is split. While we have many workers unemployed, we also still have a gap of over three million open positions across the U.S. Why? Because skills shortages still exist across fields like technology, bio-tech, energy, aerospace, etc. As long as these gaps exist, companies will seek a competitive advantage recruiting them. RPO provides valuable services, including talent mapping, specialized sourcing, social media expertise, talent community building, and coordination.
• Reach is important, but ability to execute locally is paramount. No matter how good your strategies or presentations are, actions speak louder than words. Providers need established operations, knowledge of localized practices, solid networks and relationships, and brand recognition in the market in which you’re hiring.
• RPO is not just for the enterprise. In some ways, mid-market companies can benefit from RPO more than larger enterprises. Scalability and unpredictability are big concerns for any company, but even more so for small and mid-sized organizations. RPO provides an opportunity to scale and broaden reach, leverage platforms with greater economies of scale, and strengthens focus. Your company might not be able to buy a tech platform or deliver a process as effectively for single use. But an RPO can maximize its effectiveness because it serves many clients with repetitive process management.
• Technology and methodology continue to evolve and consolidate. More RPOs have taken on the attributes of the managed service provider model. Simply put, clients want more productivity out of their employees and providers. RPOs are managing more processes, partners, and relationships across the U.S. and the globe. People want solid program management. Not just recruitment process execution.
• Integrated talent management is becoming more real every day. Metrics, performance management, forecasting … Companies need real-time, just-in-time scenario planning. RPOs have these competencies and access to market data that is extremely valuable.
• Don’t overlook point of service RPO models. Clients benefit tremendously from partnering to manage candidate screening, recruitment coordination, talent community building, offer administration, onboarding, etc. But many RPOs can unbundle their services and offer a single or multiple point of service model for ongoing or project-based recruiting. It doesn’t have to be all-or-nothing.
• Avoid the hype! Great marketing and thought leadership is fantastic, but execution trumps everything. Just because you’ve heard of an RPO provider or seen them at an event, doesn’t mean they’re a great fit for your organization’s needs.
• Beware the behemoth. The biggest RPO provider isn’t always the best. You could get lost in the sea of the largest clients.

Program management is the ultimate success factor. Make sure your RPO has a solid program management foundation, maturity, methodology, and experienced talent.

Big RPO deals like Talent’s contract with Telstra will inevitably take business away from other recruitment companies, admits Talent2 CEO John Rawlinson, but the trend towards RPO and MSP can also provide new opportunities for smaller agencies.

Addressing the RCSA Conference in Port Douglas last week, Rawlinson said Telstra might make anywhere between 3000 and 5000 new hires a year.

“They used to go to multiple agencies. Now we do 80% of those through Telstra Careers. So I’m not going to sit here and say it’s not going to diminish [the amount of work available], because there’s… three or four thousand less positions now going to agencies.”

However, Rawlinson said, there was often room outside big, high volume deals for recruitment firms with highly specialised knowledge, or access to hard-to-find candidates.

Meanwhile, generalist recruiters might find that they were doing less work with the major employers like Telstra, but getting more work from “‘smaller but growing organisations, that haven’t necessarily got the scale to go with one of these outsourcing models”, he said.

“These sorts of models do, to a certain extent, level the playing field and enable those that… fill specialty niches, or have a great value proposition, or are more efficient, or are just plain better… to actually get more of the work out of those organisations,” he said.

“[Outsourcing] can be both friend and foe – it just depends on how you work with that opportunity,” said Rawlinson.

Most Australian companies still too small to warrant MSP deals

Rawlinson said that although in many ways Australia had a “more sophisticated, more coordinated” recruitment industry than the US, it had lagged behind in adopting recruitment outsourcing models because employers were generally smaller here.

“MSP programs typically run with at least one thousand contractors, and I think they run better when you’ve got three, four or five thousand contractors – and there are not that many organisations in Australia that have that scale,” said Rawlinson.

For medium-sized organizations, he said, going back to the traditional agency recruitment model might sometimes be the best decision.

“Any less than 100 hires a year is very difficult for us to make these programs work, and we’d be suggesting that you’d be better off having really good partnerships and working on the processes you have with your external suppliers – your agency based suppliers.”

RPO brought stabilised earnings
Rawlinson said Talent2′s original decision to launch into outsourced services had been designed in part to create sustainable, annuity revenue.

“When Morgan & Banks was a listed company, we always used to get the investors saying: ‘We love your company, we love the profits, but really, your assets go up and down the elevators every day,” he said.

Source: Shortlist