The growing scarcity of talent around the world and its potential effect on global productivity continues to be a problem for various businesses, governments and private individuals. Thanks to recruitment process outsourcing (RPO), companies can now trim down the resources they need to devote to hiring so that more time and effort can be concentrated on core competencies.

What is RPO?

RPO is a type of business process outsourcing wherein a company –either big or small– turns over all or a fraction of its recruitment functions to a service provider. Based on the statement released by the RPO Association, recruitment process outsourcing takes place when an external provider operates as the company’s internal hiring department for all or a portion of its job openings.

RPO service providers deal with all of the recruitment steps from the profiling to the reception of newly hired employees. A well-managed RPO will also increase the company’s recruitment time, improve the quality of the applicant pool, make demonstrable metrics available, drive down overheads and enhance legislative compliance.

Alternatively, intermittent recruitment support such as transitory, contingency and decision-making search services is more comparable to co-sourcing, out-tasking, or simply sourcing. In this case in point, the external service provider is the source of specific types of hiring functions.

The major difference between recruitment process outsourcing and other kinds of recruitment lies in the fact that the first assumes possession of the process while the latter is merely part of the process being dealt with by the company that purchases their services.

The Benefits

Promoters of RPO assert that the solution tenders enhancement in quality, service, speed and costs. In addition to that, the cost benefits that a company acquires because of business growth—also known as economies of scale—allows them to offer staffing processes at a much lower expenditure while economies of scope makes it possible for them to function as first-rate specialists. Economies of both scale and scope are believed to arise out of a bigger team of recruiters, records of applicant resumes, and venture in recruitment networks and tools.

Recruitment process outsourcing solutions are also deemed to alter preset investment costs into flexible overheads that oscillate together with fluctuations in recruitment activity. Businesses may pay via transaction instead of by team member, therefore staying away from under-use or imposing costly discharge of recruitment personnel when activity is sluggish.

The Drawbacks

If a business does not succeed in defining its overall recruitment tactics and hiring goals, then any recruitment plan have a tendency to fall short in meeting the company’s requirements. This is particularly true for outsourced services such as RPO. It may only be successful in the context of a well-delineated business and recruitment strategy.

Like any program, a company ought to supervise its RPO operations. It must make preliminary guidance available, as well as continuous monitoring, in order to ensure the preferred outcome. On the whole, giving directions to external activities can exhibit a considerable challenge concerning management. Outsourcing of business processes may be unsuccessful or demonstrate an inadequate organizational fit. Thus, an inappropriately executed RPO could also lead to diminished recruitment efficiency.

Another possible drawback of recruitment process outsourcing involves an over-sized expenditure meant for staffing transactions. In other words, the total sum could amount to more than the actual costs of an in-house recruitment division.

Outsourcing has become a common term used in businesses – big or small. It is the process of hiring organizations to do specific functions for a certain company. Most often than not, most of the outsourced jobs are those that are not directly related to the core of the business activities.

Rather, the functions are those that can be considered as non-core business activities or those that are not related to the main business but are somehow quite necessary for businesses in general.

Outsourcing, as it has been proven for the past few years, has become an essential part of businesses. Companies from all over the globe practice it but how many really know what the history of outsourcing is.

Just like with any other things, outsourcing too has a beginning. To be able to appreciate what outsourcing really is, a quick look at its history is necessary.

The Roots

It has been said that outsourcing started ever since people began producing and selling items such as tools, food, and household items. As society and communities grew, people began to do specialized works and traded with other people goods for services and vice versa. Looking at it, it can be said that people a thousand years ago were already practicing a form of outsourcing.

When the industrial age came between the years 1800s to 1900s, companies were vertically integrated and did not practice outsourcing. Each company took care of everything from production to manufacturing to deliveries. Companies in these era handled their own payrolls, taxes, and hired their own lawyers. Everything was an internal affair. This kind of setup however does not encompass all organizations at that time but this was the trend at that time.

As time passed by, specialization contracting gained popularity especially in the field of service industry. This was the beginning of the modern outsourcing practice. During the industrial revolution, services such as insurance, engineering and architecture have begun to be outsourced to 3rd part organizations although the client company and the specialized organization usually just belong to the same area or country.

The Beginnings Of Offshore Outsourcing

Onshore outsourcing was growing to be more and more productive for businesses. It all started out with outsourcing low-valued items such as apparels and toys and transcended to outsourcing items with higher values such as appliances and other electronic gadgets. In the history of outsourcing, it was manufacturing that first left the main land to offshore destinations. This move by businesses was for the chance to save on costs.

At first, offshore outsourcing garnered a few apprehensions from business proprietors. But with the improvement of logistics, offshore outsourcing gained popularity. With the development in education and skills of lower wage countries, the value of offshore outsourcing became higher. In fact, during the 1970s, computer related manufacturing was also outsourced offshore. The process of outsourcing just grew and has never stopped since.

Today, outsourcing different functions has never been easier with the help of the information technology. Data can easily be sent and received through the information superhighway. It is not uncommon to see in your daily items such as in the R & D of your prescription drugs that they are outsourced to companies in other countries.

Thanks to the advancement in communication technology, it enabled business to save a lot of money on call centers. Companies today are now taking advantage of call centers and are now considering it as one of the most economical solutions for businesses.

Firstly, call centers manages tasks to satisfy customers, and attract customers for your company. Call centers can also be help desk support and advice center for your business and it can handle both inbound and outbound calls for your company.

As you can see, call centers are a very important tool for businesses today in terms of customer relations. It is considered to be an essential part of any company in order to satisfy, attract and in keeping contact with your clients. However, it is also a fact that putting up your own call center for your company can be very costly. It will require you to purchase the technology needed for it, such as computers, software, and it will also require you to hire additional employees to act as call center agents.

This is why companies today are now considering hiring call centers offshore. If your company needs a call center, you can outsource your call center in other countries in order to cut some operational costs. Outsourcing your call centers in other countries, particularly developing countries, is very cheap because of the difference in the minimum salary rates with a particular developing country. You will see that the minimum wage is far lower than in your country.

Your company should prefer an offshore call center that hires staff with good English speaking skills in order to communicate with your clients better. Developing countries, such as China, Philippines and India are three of the most popular countries that provide great quality services for a call center. They have a lot of talented individuals with great English skills that will be able to communicate effectively with your customers.

When you are outsourcing your call center offshore, it is important to consider the following things before you sign the contract in order to ensure quality service:

• English proficiency – The call center agents in the offshore call center should be able to have good English speaking skills. They should be able to communicate with your clients well in order to satisfy their inquiries. This is very important because call centers are supposed to be the communication ties between your client and your company.

• Average call waiting time – It is also important that you should find out how much your client will have to wait until their calls are taken by the call center agent. It is important to realize that there will be clients who will be complaining about your products and services and you should realize that they are already irate before they even made the call. Making them wait will only add to their dissatisfaction and irritability. This is why it is important that a call center should be able to take your client’s call as soon as possible.

• Length of conversation – The call center agent should be able to handle the calls as short as possible. They should provide the best answer possible in order to satisfy your clients as soon as possible and make the call as short as possible. By doing this, the call center will be able to handle more calls.

These are some of the features that you should look for in a call center. This is why it is important for you or your staff to call the call center and pose as a client in order to know about the quality of their work and also make sure that it isn’t deteriorating.

Today, companies are now hiring other companies in other countries to do their business or part of their business. This particular type of business strategy is called offshore outsourcing.

It is a fact that in today’s business world, offshore outsourcing is now becoming a very feasible trend for companies who wants to expand their business or to simply reduce their overhead expenses.

As an entrepreneur, you would definitely want to reduce the operating costs of your business without sacrificing your businesses functionality. By outsourcing your business or at least part of your business, you can indeed expand and reduce operating expenses.
Outsourcing is a very large industry in developing countries, such as India and the Philippines. Your company can definitely hire companies in these two countries to outsource part of your business or even all of it. However, you should take note that you should choose an outsourcing company that provides quality and professionally done jobs.

You should also consider which country you should outsource your business in. People in different countries have different culture and education. You have to choose which people, culture, and educational standards that your company can benefit from.

For example, in India, this country has one of the largest populations of IT professionals in the world. Because of the British influenced educational systems in this country, the education on math and science in this country is greatly emphasized. This country has one hundred and twenty thousand trained IT professionals added to the workforce every year.

India is now being considered as an IT center in developing countries and is also one of the countries that United States companies prefer for software or IT outsourcing. India has created a strong reputation as one of the leading countries in IT outsourcing industry in the world.

In the Philippines, it is an entirely different story. Because this nation is considered as Asia’s English speaking countries that have 94% literacy rate, this country is also considered to have a large population of IT professionals in the world. With over three million college graduates joining the workforce every year, this country is indeed one of the best source for talent.

Although the Filipinos are Asian, it was influenced by Americans for over 50 years and has developed a western culture. Filipinos loves watching American television and because of this, the people in the Philippines are fluent in American English and can communicate effectively with Americans and other English speaking nations.

Because the Filipinos are fluent in American English, this country have become a premier choice of the United States for call center outsourcing. If you are looking for call center services that are able to provide quality customer support service, the Philippines is definitely the country to look for call centers. Although India charges less for its call center services than in the Philippines, more companies in the United States prefer the Philippines more for customer care jobs because of the quality of work they offer.

Another factor that the Philippines is chosen for call center jobs is that not only that the people here speaks fluent American English, but they are also friendly and helpful in nature.

These are the things you should consider when choosing a country to outsource your business or at least part of your business. You also have to consider the people living in it and the culture they were brought up with in order to know where to outsource your company’s project.

Offshore outsourcing is simply defined as outsourcing to outside countries. Some people may think that the process of offshore outsourcing is a walk in the park producing large sums of profits. This notion however is erroneous. It takes a lot of work and initiative to make offshore outsourcing work and produce desirable results. It involves choosing the right model of offshore outsourcing that would fit a particular business need or situation.

Choosing the right model of offshore outsourcing is a very critical phase that companies undergo. Any decision made can either make or break their business options offshore. Making the decision on what model to choose involves aspect of selecting which country, economic conditions of a country, international business strategy, and outsourcing strategy.

There are currently three models of offshore outsourcing that are popular among businesses. These three are outsourcing to a service provider, joint ventures and subsidiaries.

Outsourcing To A Service Provider

Outsourcing to a service provider is the most evident offshore outsourcing model. It has a lot of coverage that range from small projects to multi-year contracts that amount to millions of dollars.

The simplest form of outsourcing to a service provider is onsite subcontracting. In this form, a company assigns its skilled personnel directly at the client’s site. The people assigned will then become part of the client’s team. This form of offshore outsourcing is perhaps the simplest and is commonly used by small organizations that are tied with the client company.

Another form of outsourcing a service provider is pure offshore projects. In this form, the scope of the functions is properly defined and work can be done remotely that requires little to no supervision. A good example of this is assigning work to small organizations or even to individuals, freelancers as they are commonly called. With the help of online tools, projects can easily be sent and received by hired firms or individuals all over the world.

Offshore outsourcing individual projects is another form wherein a certain function is subdivided into smaller chunks to be outsourced to vendor companies. This is usually assigned to vendors with whom the company has close ties with.

Joint Venture Offshore Model

In this model of offshore outsourcing, one organization establishes a relationship with a local company wherein both companies contribute to their resources. The main purpose of this goal is “I lend you my strength and you lend me yours.” This creates a win-win situation wherein both companies can gain something from the tie up. With this kind of setup, the client organization will be able to minimize the risks of offshore outsourcing while on the other hand the local firm is given the opportunity to work with a large company scaling up their value chain.

The joint venture offshore model is sometimes considered as the stepping stone of the client organization to move on to the next offshore outsourcing model which is the subsidiary offshore model.

Subsidiary Offshore Model

From the joint venture model, a company may transcend to the subsidiary offshore model. However, it is also possible for the client company to move directly with the subsidiary offshore model without passing through the joint venture model given that they have enough confidence and are comfortable with tackling the local market. The most challenging part in this kind of offshore outsourcing model is the general management of the onsite units especially the staff.

Conclusion

Offshore outsourcing is not as easy as some people may think it is. It needs thorough planning as well as making the right decisions. This includes choosing the right offshore outsourcing model that your company needs. It is even possible that a hybridization of the models is needed just to suit the needs of your organization. So plan well and choose well.