backThe Sunday Times
Extracts taken from "Outsourcing cuts cost of hiring"
More companies are hiving off recruitment. But what's the best way of doing it?
Mary Braid reports
Nobody need worry about outsourcing
Valentine Feerick
chief executive of GCG
IF you partially outsource recruitment and keep your hands on some of the reins, there is no doubt that outsourcing will definitely work out cheaper. However, if you wholly outsource to a partner that you trust, the cost savings will be much higher — up to 40%.
I find the worries that HR has about outsourcing rather soul-destroying. I just don’t understand them. It seems that HR is probably not as confident or strong in its position as it ought to be. HR people shouldn’t worry about something that frees them up to develop the pool of talent in their organisations.
In the past four years, I’ve seen the emergence of a new breed of HR director with strategic training, but these directors often come from other parts of the business. HR was historically about administration but it is changing.
THE trend towards outsourcing recruitment appears to be gathering pace. In the past six months there have been several lucrative deals, including Unilever’s seven-year contract with Accenture to handle its HR services in 100 countries.
The BBC has outsourced its HR to Capita. At Centrica, the utilities company, many HR functions are being run by Hewitt Associates. Lloyds TSB has handed over administration and recruitment functions to the technology company Xansa.
The trend is causing a great deal of excitement in the business world — and anxiety among HR professionals, who wonder what there will be left for them to do.
So what’s driving the current trend? Will it continue and does everyone see it as a healthy development?
Valentine Feerick, chief executive of GCG, which offers consulting and recruitment services, including outsourcing, to FTSE 350 and Fortune 500 companies, said outsourcing can substantially cut overall recruitment costs. “The point is that we don't have to keep reinventing the wheel when it comes to recruitment. It's what we do,” he said.
But some HR experts claim that while the big outsourcing deals are getting the publicity, some organisations are bringing HR and recruitment back in-house because they are unhappy with the quality of outsourced services.
Feerick said such companies have generally made two mistakes: “Either they selected the wrong outsource party or they only partly outsourced. Some companies keep some of their recruitment processes in-house when they outsource and the result is a hybrid arrangement that breaks down.”
He believes that these hybrid deals demonstrate a lack of trust in the outsourcing partner. “Outsourcing is not for the fainthearted,” he said. “But where it is done properly it can really work well.” Feerick said that for recruitment outsourcing to work it has to involve the transfer of the whole process, not just bits of it. Partial outsourcing will not save a company money.