The recruitment industry has been an increasing supporter of outsourced teams as part of the recruitment process.
For the past decade this has been especially true in the US and the UK, and with rising activity in Australia.
It is understandable that recruitment agencies are looking to outsource. HHMC Global’s research shows that rising staff costs, a lack of experienced consultants to hire, and increasing costs for support functions like learning & development are real issues. They impinge on a company’s ability to grow and be productive. Those costs are intensified by the industry’s reduced margins, increased compliance complexity, and increased processes to attract scarce talent.
It is no wonder that alternate methods have been investigated for time-consuming processes. Sourcing into VMS/MSP environments, compliance processes, and high-touch placement activity like Locums have given rise to sophisticated recruitment outsourcing organisations (or captive centres) in countries like India and the Philippines.
I’ve had the pleasure in meeting a number of the top international providers. One of these, IMS People Possible is an example of excellence in this area: oganisation growth, long term customers, provable return on investment, very high Net Promotor Score feedback, and an increasing range of sophisticated solutions for recruitment agencies internationally.
But not all case studies are positive, and not all recruitment agencies are fans of outsourced services.
Some may not have the leadership and corporate sophistication to enable distributed work. For some it is a moral situation, wanting to support their local economy. Others may have tried to work with external teams but failed for any number of reasons.
The pressures on costs and profit have not gone away. The limitations to growth still exist. Clients continue to demand new solutions that require efficiency and scale.
And then came COVID-19
In 2020 almost all recruitment agencies were caught unprepared for dealing in a COVID-19 world. It impacted both personal and business lives.
The biggest organisational change was remote working and forced distancing from human interaction. We are still dealing with that and have no clear timeframe or strategy for getting back into a work environment in a manner that resembles a pre-COVID-19 environment.
Staff, clients and candidates have responded magnificently. A lot changed. Processes and procedures that were taboo or deemed impossible have been put in place, sometimes literally overnight.
Use of technology for communication internally and with clients and candidates is accepted. Hiring without face-to-face interviews is well underway. Even onboarding of new staff in a work-from-home situation is accepted.
The real change has been in leadership. “Management by walking around” was never sufficient but is now irrelevant. Articulated values, clear goal setting, remote coaching and mentoring, remote team activities, more nuanced productivity measures, and even changes to blunt commission structures are in place.
Greater social changes are underway as well. In Australia regional housing prices are rising faster than city prices as people appreciate they do not need to be close to an office and deal with commuting on a daily basis.
Gradually recruitment agency leaders, like their clients, are realising that in this remote work environment talent can be hired from geographically diverse places. Less organisations are restricted to the catchment area of their office.
Have wages changed? In the US and the UK there is a large variation in wages across the country. In Australia wages are relatively homogenous, although Melbourne & Sydney are more expensive. HHMC’s Research with Staffing Industry Metrics on ANZ Recruitment Industry Remuneration shows that base wages for recruitment consultants continued to grow last year.
It is internationally that cost arbitrage can be released, and also provide an environment with a relatively unlimited scale of resources.
If staff are going to work remotely then you need to consider where and how you can get a financial, performance and scale boost for your business. It wasn’t part of the plan, but the techniques for making it successful have been practiced by the recruitment industry for almost a year.
Every strategic plan should have the use of outsourced recruitment resources as part of the discussion. It may not be right for everyone but in a competitive world it demands to be investigated. This is not a new trend – there is a lot of experience to access and understand.
If you would like to discuss HHMC Global’s experience with outsourced recruitment services, please contact us.