The way in which offshore outsourcing is undertaken by recruitment agencies in Australia needs to mature. Quickly.
Recent news from a Fair Work case in the mainstream media, and a blog by Ross Clennett, have highlighted the lack of understanding of Australian employment obligations.
If you directly employ a person, and treat them in every way as an employee, then Australian employment conditions may apply even if that person is based overseas.
Does this halt the rise in offshore outsourcing of business functions for Australian Recruitment Agencies? Certainly not.
Benefits that include reduced cost, improved productivity, and scalability are too compelling. We live in a global world and as the quote goes, the world does not have a skill shortage, the skills are just in the wrong place.
A SOPHISTICATED BUSINESS ARRANGEMENT
Anytime that a business owner is considering outsourcing an ongoing process or function from its business, then the way that arrangement is put in place requires careful consideration.
I’ve had a special interest in Offshore Outsourcing for the staffing and recruitment industry since observing the growth and success of services in the US and the UK for almost two decades now. Australian agencies have really embraced the service since Covid commenced and are well positioned to take advantage of mature and sophisticated service offerings that have evolved over time.
But firstly, the decision needs to be made to build a captive centre in a country of choice, or to contract with a suitable provider. For almost all agencies – probably 99% - the correct strategic decision is to partner with an established supplier.
Direct employment of individuals in another country creates the potential to break laws in one or two countries. Employer of the Record companies exist if that is a path you want to explore and I’ve been involved in assisting some recruitment agencies become compliant in that area.
Partnering with an established supplier immediately resolves the employment scenario that is described in the Fair Work case – a business-to-business relationship can cross international boundaries, and all entities should be operating legally in the relevant country. Importantly, the individuals working on the assignments will be protected by their own country’s laws, and often the country they are working into will have high standards that need to be met, such as Australia’s Modern Slavery Act 2018.
But there is so much more to consider, and most of the decision making will relate to risk. Privacy, Data Security, Cyber Security, Confidentiality, ghosting, investment in training and retraining, commitment to quality and quantity, Account Management, and so on.
Your business will be impacted, hopefully positively, by the supplier you chose.
MY EXPERIENCE WITH IMS
I was introduced to IMS People Possible back in 2008 and HHMC agreed to assist them with its operations in Australia. It has been a pleasure to watch IMS grow and mature as this international niche industry has grown and matured. IMS is now a 3000+ person organisation across the Philippines and India, providing 24/7 services globally, almost exclusively to recruitment agencies.
I have listed some ways in which IMS has positioned themselves to be a mature partner to recruitment agencies in Australia and other countries.
I’m not listing this to sell their services in this article (although the list is impressive), but to provide topics you might want to consider as you assess working with an offshore service provider.
IMS Group Partnership Differentiators:
• External Auditing: Governed by UK public company standards with comprehensive auditing protocols.
• Data Privacy & Cybersecurity: Enterprise-grade security infrastructure and compliance frameworks.
• IT Infrastructure: Scalable technology platform designed to support business growth within a secure operating environment.
• Specialised Service Lines: Industry-focused teams with domain expertise.
• Office-Based Operations: Staff are office based across all locations with dedicated team leadership, coaching and mentoring.
• Flexible Business Terms: 30-day rolling agreements ensuring partnership alignment.
• Internal Support Capabilities: Dedicated learning & development and other support functions.
• Account Management: for all clients – from 1 seat operations to multi country and multi service line business relationships.
• Subject-matter Expertise: Specialised knowledge across recruitment verticals.
• Industry Engagement: Active participation in professional associations, including APSCo Australia.
IMS is particularly proud of their “Great Place to Work” awards as recognition of the enormous effort taken to build a business on strong values and people foundations.
I’d like to list some of the global top 100 staffing companies that IMS works with as testament to their market presence, but confidentiality arrangements prevent such discussion.
For most recruitment agencies, offshore outsourcing should be part of the strategic solution mix for growth-productivity-compliance challenges and opportunities.
But there are risks involved, and careful assessment is required. You need to determine where you want to sit on the risk curve.
HHMC Global operates within the staffing and recruitment industry on equity transactions, market valuations and business growth advisory. Contact us to discuss further.