We have been watching the jobless number and macroeconomic trends with great care over the last several months. While the euphoria about the net rise in jobs announced at the end of April may not be indicative of a trend, many sectors are optimistic that hiring will soon increase.
What does that mean in terms of HR strategy? And, specifically, are there outsourcing levers that can be used to moderate the impact of the approaching sharp return to full productivity?
All the indicators are starting to point to jobs recovery. In the United States, inventory is dropping, temporary and contract employment is rising, unemployment claims are dropping and exports are slowly -- very slowly -- beginning to show new health.
During the downturn, many major U.S. and western European employers took every opportunity to trim workforces, and employers have benefited from very low inflation to resist any substantive increase in real purchasing power.
But the need to restaff and reskill for full production is already becoming apparent. HR executives are going to need to use their internal recruiting resources for those jobs that are mission-critical to the firm. Jobs that do not require recruiters to have deep industry knowledge can readily be handled by reputable recruitment-process outsourcing providers, which have been handling increasing volumes of generic recruiting.
While all hires are important, some are absolutely fundamental to a company's development and competitive position. Those positions require dedicated internal recruiting talent. Other jobs, and probably 70 percent of all hires in a given year, can be effectively sourced to the large and growing RPO segment.
Certainly, HR executives should respond to the need to scale with renewed recruiting by considering RPO for specific segments of hiring needs.
In addition to recruiting, HR leaders have a critical need to provide internal training and skills development to middle managers who should direct and supervise increased production. Again, there are multiple applications for learning-management systems and multiple full-service outsource providers that can amplify a company's learning resources to respond to the coming deficit in talent.
Outsourcing providers such as IBM and Xerox-ACS are investing in social-networking tools and other means of addressing the learning patterns of younger adults. Instructor-led courses are giving way to games, interactive media, video clips, learning-affinity groups and other media to reach Gen-Xers and Tweens who will need to accelerate internal development in the workplace.
As the market for talent tightens, HR will need to modernize performance measurement, compensation and pay-delivery systems. The HRO market can clearly offer robust applications and single-source responses to these needs, but we recommend HR executives consider their total talent-management design to effectively integrate sourcing, development and retention through performance and compensation.
The race will go to those who best manage all of these critical areas.
Lowell Williams is executive director of HR Advisory Services for EquaTerra, a BPO consulting firm based in Houston. He can be reached at email@example.com.