RPO & Staffing

FIRST ADVANTAGE ACQUIRES RECRUITERNET INC.

Projectix Applicant Tracking and Talent Management Expands HR Service Offering



ST. PETERSBURG, Fla., Sept. 29, 2005

First Advantage Corporation (NASDAQ: FADV), a global risk mitigation and business solutions provider, today announced that the company has acquired Recruiternet Inc

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HRO in Times of Terror

European and American HRO differ in attitudes towards security and safety.

by Jay Whitehead

July 7, 2005, London, England. It is morning rush hour in the most public transit-dependent city on Earth. Every day, nearly three million people use the London Undergrounds 274 stations.

 

At 9:13 a.m., a “code amber alert” shut down the system, station by station. Three bombs had exploded within 50 seconds: two on the Circle Line, one on the Picadilly Line. Around 10 a.m., a suicide bomber blew up a double-decker bus near Tavistock Square. Altogether, 56 people died and 700 were injured. Nearly all, except the bombers, were employees commuting to work.

 

Within minutes of the “amber alert” notification, Scotland Yard ordered surveillance videos from all public transit locations to be analyzed. Just one year before, a project to install 500,000 video systems had been completed. The suicide attacks would test the reliability of the in-station cameras. Within 24 hours of the attacks, police released blurry photos of the now-dead bombers, which were published worldwide.

 

Fourteen days later, four young terrorist wannabes carried explosives made from the same type of acetone and other household products–a copycat plan that had different results. None of the bombs exploded, and all four clueless suspects were caught on camera as they ran for the exits. Within seven days, they were all in police custody. None succeeded in becoming “one-unders,” the relatively genteel British version of a much more indelicate New York term for a subway suicide: “track pizza.”

 

The Underground itself only has about 4,000 dedicated employees. The railroad is really run by two outsourcers, known as Public-Private Partnership (PPP) companies, Metronet (a consortium of Balfour Beatty, WS Atkins, Bombardier, EDF Energy, and RWE Thames Water) and Tube Lines. The firms have more than 50,000 employees between them. Many of the video cameras that caught the bombers were PPP-run. Outsourcing European-style has always been more security-aware than the American flavor.

HRO providers in North America and Europe are learning from the London example.

 

To date in America, workforce security has been focused less on terrorism and more on gunplay from disgruntled workers or family members. Both HRO providers and American employers with whom I talk are rethinking this position in light of both 9/11 and the London attacks.

 

Terrorism in the American workplace has been essentially ignored in favor of far-too-frequent acts of workplace violence. Truth is, American workers often “go postal” (a crude reference to several recent cases of U.S. Postal Service employees shooting up a post office). It is the workplace equivalent of “road rage.” The reason behind these grisly temper tantrums: the broad availability of guns. The American Society of Safety Engineers reports that on-the-job shootings are the third-leading cause of on-the-job fatalities. In the nine months following the September 11, 2001, terrorist attack, www.workplaceviolence911.com reported that 34 people died from workplace gunplay. Three quarters of the acts were committed by current or former employees, and one quarter were domestic violence that spilled onto the job.

 

Ironically, the fact that Americans fear being shot at work much more than they fear terrorists goes back to citizens’ legal right to bear arms–a holdover from the frontier days when we had to fight off thieves, animals, or the British. Today, our cops control crooks, we have domesticated all the animals, and the British are our allies. That is why it seems overwhelmingly stupid that 44 million Americans own 192 million firearms, 65 million of which are handguns.

 

For employers, electronic background checks seem to be today’s weapon of choice against violent employees. But they give precious little insight into who will “go postal.” Video surveillance gets closer to the heart of protecting employees–from both a rogue rifleman and acts of mass terror. And it brings the $59 billion HRO market closer in alliance with the $95 billion worldwide private security industry. It seems to me that these two industries need to get to know each other better. Oh yeah, and Americans need to start getting rid of their guns.

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Politics as Usual

Outsourcing gets caught in bureaucratic red tape.

by Glenn Davidson

A recurring theme of this column has been that the rationales for HRO go well beyond cost savings and grow deeper year by year. This summer, the City of Chicago provided yet another reason why recruitment process outsourcing is a good idea–because it helps avoid all criticisms about patronage-based hiring.

Since 1973, the City of Chicago has operated under a legal requirement–known as the Shakman Decree–that it cannot make politics a factor in the hiring, firing, promotion, or transfer for the vast majority of city employees. Think for a minute about the vagueness of the word politics when you consider how difficult it is to operate under this decree. Must it be election politics or can office politics apply? And since when is it possible to completely divorce government from politics?

Imagine inheriting a traditional political machine and now having to take all politics out of the equation. The city was an old fashioned one-stop shop for its own services. It employed its own janitorial services. It maintained tow trucks and owned dozens of parking lots. Need something shipped from one city office location to another? You would have to use a city-owned truck and a city-employed trucker. Now take these tens of thousands of employees and demand that none of the hiring and firing decisions may be touched by “politics.”

When Mayor Richard M. Daley was first elected in 1989, he saw this vast edifice of bureaucracy and legal straitjackets and decided it was time that the city got back to core competencies. The mayor began a process-by-process overhaul of city government, outsourcing dozens of functions that were costing taxpayers money and making the day-to-day operations of Chicago unwieldy.

But in politics, there is always a backlash, and this one took on a new name: pinstripe patronage. The argument was that Mayor Daley was circumventing the Shakman Decree by taking government hiring out of city hands and using the power of government contracting to advance and protect his own power. Opponents of the mayor decried the way unions were being hurt by privatization. They scrutinized campaign contributions, and most recently, they found a series of violations in the way some city programs were operated, touching off a federal probe. During the past several years, the citys momentum for outsourcing has slowed and some city services, mostly for political reasons, have been brought back in-house.

Just to prove that you can’t win by caving to your opposition, now the mayor’s office is being investigated by federal authorities for violating the Shakman Decree and favoring campaign workers for city positions. Damned if you do or don’t. The mayor’s office is now under siege both for outsourcing and insourcing, with every step it takes examined under a microscope.

Whether some city-run or privatized services were tainted by corruption is for the courts and the Chicago voters to decide. But one thing is clear to any informed observer of the city’s outsourcing efforts–the mayor had it right the first time.

Privatization saved city taxpayers millions of dollars and vastly improved city services. Are there political risks to outsourcing? Certainly. But as the Mayor’s office has learned all too keenly, there are equal or even greater risks if you don’t outsource. Critics are critics and they will find a way to pick fault one way or another. Therefore, it is best to go with the course you know is right.

Fortunately for the City of Chicago, Mayor Daley now recognizes that taking his foot off the accelerator was a mistake. In the wake of the recent Shakman Decree allegations, the mayor announced that the city plans to create an independent board to oversee all of its hiring. While this board isn’t technically an outsourcing partner, it will be so similar in scope to a shared-services organization that the difference will be purely semantic.

According to a July 20, 2005, Chicago Sun-Times report, Mayor Daley has been pushing his staff since May to come up with forward-looking, aggressive proposals. One unnamed Daley advisor was quoted as saying, “This is going to stun people. Hes through nibbling at the margins.”

Mayor Daley’s experience is a good lesson for all managers. Once youve determined that outsourcing is the right thing to do, go full speed ahead. After all, would you rather defend a bold new course with proven results or a system you never wanted in the first place?

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Identifying the Top Trends Shaping the RPO Market

Sue Marks of Pinstripe continues her conversation on recruitment process outsourcing.

by Joseph Vales, Kerry Ann Vales

Sue Marks’ foresight and focus on staffing issues has made her an outsourcing visionary with an entrepreneur’s passion that has helped to shape and define the future of the recruitment process outsourcing (RPO) market. Through her talent acquisition firm, Pinstripe, Sue now leads a team that has successfully structured hundreds of major staffing transactions and strategic alliances using her groundbreaking R2R (Requisition-to-Results) approach. In Part Two of our interview with Sue, she discusses the top trends driving successful RPO transactions and what RPO providers need to do to differentiate themselves in the marketplace.

JV:
Why is RPO getting so much attention these days?

SM: RPO cuts costs and improves hiring results. It’s as simple as that. But at a deeper level, driven by accelerating global competition, organizations feel a need for agility like never before. They must improve performance, mitigate risk, and reduce cost all at the same time. Given the forecasted labor shortages and the corresponding rising recruitment challenges, companies are looking to RPO not just to supplement, but rather to transform their talent acquisition and management functions. Executive teams are looking to their chief human resources executive to maintain and improve their business’s organizational capability and intellectual capital. In most organizations 80 percent of costs are people costs. A firms overall performance could improve drastically if their workforce had the skills, motivation, and training necessary to improve the day to day execution of their responsibilities by just 20 to 25 percent. RPO, or R2R as we call it, provides a huge opportunity to do that by improving competitive advantage with
innovative actions. It can’t help but draw attention with numbers like that.

JV: How will the use of RPO unfold in the market?

SM: Buyers will begin to realize that they can improve ROI by extending the value chain covered in RPO deals. Thats why Pinstripe’s flagship product is R2R, not simply RPO. The most astute buyers and providers know that winning the war for talent on both fronts-acquisition and retention-wins the game and reduces the need for recruiting simply to replace the churn of turnover. Early adopters are moving towards a true “end-to-end” definition of talent acquisition that extends beyond the point of hire through training. These buyers are designing their programs under this new model, believing they can capture the greatest ROI and transformational impact if they do so. They are moving from outsourcing simple “recruiting” to the real talent acquisition and management value chain, which extends through initial on-boarding, orientation, and training. Our model itself is a 1,100-step process that transforms RPO to R2R, and then to organizational ROIgiving early adopters a major competitive advantage. Over time, late adopters will be moved by competitive pressures and cost drivers and embrace RPO. We believe that after payroll and benefits, recruitment will be the third most frequently outsourced HR function.

JV: Do you think it will be the larger RPO firms or the more intimate ones that will be in highest demand?

SM: The RPO firms that help their clients win in the market will be the ones that win in the RPO marketplace. As buyers continue to feel pressure to drive throughput and improve service levels, they will increasingly look to RPO firms that can bring world-class processes and change management tools to their organization. Buyers will begin to demand significant domain expertise from their providers, fueling an industry trend towards verticalization. The provider’s ability to “see around corners” for clients, their ability to harness technological innovation, and, finally, their ability to really execute and get real HR and business results is what the market leading RPO provider will offer. Providers that have “organizational DNA” composed of Six Sigma process excellence and true BPO expertise will trump those that are simply high-volume recruiting firms. Providers will need to have the ability to help the client transform business processes, and as the talent gap continues to grow, RPO providers will have to rise above the mundane, same old, same old ways of sourcing and moving talent through the value chain from beginning to end. The RPOs that understand their clients businesses-marketing, branding, process, supply chain, metrics, etc.-will be the ones that thrive.

JV: How do you see the use of physical supply chain techniques affecting the future marketplace?

SM:
The physical supply chain is a key driver and competitive advantage for organizations like Wal-Mart. However, in a world where competitive advantage doesn’t last long, where products can be replicated with relative ease and cranked out quickly in low-cost manufacturing countries, knowledge and innovation-the purview of an organizations people-make the difference. Almost no one today is thinking of labor-based supply chains the models simply do not exist. IBM recently announced a labor supply chain initiative that they estimate will save them hundreds of millions of dollars annually. Where firms like IBM go, the rest of the world will follow. RPO providers with VMS [vendor management system] and supply chain management expertise will be the big winners here as they help organizations plan and deploy their total workforce. Adapting demand-driven supply chain techniques will help clients achieve significant business performance improvements. Process and technology innovations in this area will bring some organizations closer to the goal of “Total Workforce Management.”

JV: Taking on a new venture like RPO is a big step for some companies entering into this market for the first time. How will providers ease the minds of new buyers?

SM: Risk mitigation is a huge issue. With industry scrutiny, an unforgiving regulatory environment, Sarbanes-Oxley risk management is taking a bigger and bigger piece of executive managements attention today. RPO providers must be true experts at process excellence and internal controls to help their clients manage and reduce risk today. With technology access and optimization, business process integration and centralization, business flexibility, business expansion and speed to generation of new revenue streams, and regulatory compliance-some companies and individuals worry they will “lose control” if they outsource.

In our view, if they are really honest about what is happening today in their organizations, they don’t have good baselines of how they are spending their time and money and efforts now. If done properly, organizations gain better control. In a properly conceived and executed outsourced environment, they will have clear processes and better performance metrics than they’ve ever had. They can reprioritize quickly and change focus areas, and with that control, they will have minimized their risk.

JV: RPO has yet to break into the global marketplace. Do you see offshoring in its future, and how will it fare?

SM: RPOs need to have refined standardized processes, extraordinary training, quality control mechanisms, and global management and technology capabilities to support clients’ global needs and extended value chains. Contracts for recruitment process outsourcing will begin to contain an offshore component, taking advantage of the time difference and labor arbitrage. Corporate culture match will become a legitimate buying point in outsourcing contracts, knowing how hard they are to start and how much harder contracts are to unwind.

Cost isn’t the only measurement; organizations must contract for service levels as well. And those service level agreements must be balanced in a way that holds providers and buyers accountable for the robustness of the partnership and their results. Governance of relationships will evolve. Those relationships with the best culture match will have the best channels of communication. When outsourcing deals fail, most people believe it is poor performance on the part of the provider. But the root cause can almost always be traced to poor communication.

JV: What benefits should an organization expect to achieve from an RPO provider?

SM: At the end of the day, the three most important things a buyer should be confident they will get from their RPO provider are: performance improvement, organizational flexibility, and cost savings. While RPO is process-centric, and process excellence is paramount-process is about doing things right-smart buyers will realize they first need to be doing the right things. It’s all about execution. Business value will be driven by the real melding of people, process, and technology in a way that seamlessly integrates into the client organization through a mix of delivery methods and geographies.

Sue Marks is the CEO of Pinstripe. For more information she can be reached by telephone at 1-877- 797-3379 or by email at smarks@pinstripetalent.com.

This article was co-authored by Kerry Ann Vales. For more information she can be reached at KAVales@aol.com.


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HOTGROUP PLC ACQUIRES RECRUITMENT PROCESS OUTSOURCING SPECIALIST

Recruitment specialist the hotgroup plc today announces the acquisition of Profiles Resource Management Ltd (PRM) for 750,0001 in a cash buyout. PRM provides outsourced recruitment services2 to some of the UKs leading employers. This acquisition adds a new capability to the hotgroups services, representing a strategic move into HR managed services which will complement its existing online and traditional recruitment capabilities.

Recruitment process outsourcing is experiencing rapid growth3 and the acquisition of PRM builds on the hotgroups strategy of deploying technology to increase efficiency in the recruitment process for employers

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Cyberonics Grows by More than Fifty Percent with the Help of The RightThing

– The RightThing Screens 20,000 applicants resulting in 200 hires –

Findlay, Ohio – August 8, 2005 -The Right Thing Inc., an end-to-end provider of employment process outsourcing, today announced the successful completion of its agreement with Cyberonics (NASDQ: CYBX) to hire a fully qualified team for its recently FDA-approved VNS Therapy System for treatment resistant depression. Resulting in a national team of more than 200 new personnel, The RightThing Inc

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TalentTrack Secures New Critical Care Nursing Project To Support Shands Jacksonville National Recruitment Efforts


[Toledo, OH – July26, 2005] – TalentTrack announced today that it has won a contract to provide recruitment process outsourcing services to Shands Jacksonville, a Level I Trauma Center with over 4000 employees.

Under the terms of the contract, TalentTrack will provide complete end-to-end recruitment outsourcing services for the hiring of critical care nurses for their trauma service. According to Mark Melfi, Executive Vice President of TalentTrack, “We are excited to begin this new partnership with Shands Jacksonville and look forward to helping them achieve their hiring goals by placing top nursing talent into their organization in a timely and cost effective manner

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Caterpillar Chooses Kenexa for Survey Services

Kenexa (NASDAQ: KNXA), a provider of talent acquisition and retention solutions, announced that it will be providing Caterpillars workforce with a comprehensive survey offering to gather valuable employee feedback. Caterpillar is Continue reading →

A Sweet RPO Package

Case Study: Hershey foods find success with RES.

by HROT Staff

After a thorough review of their Human Resources Strategic Plan for 2000, it was determined that in order for Hershey Foods Corporation to continue to attract and retain a talented, diverse workforce, it would need to implement new methodologies and state-of- the-art technology. Hershey has long been a household name when it comes to candy, but we needed to work on becoming an employer of choice, said Kerrie Wolfe, Manager, Strategic Staffing and Employee Integration, Hershey Foods Corporation. Not certain that their goals could be accomplished by only utilizing their internal resources, Hershey began researching available outsourcing capabilities, and by August 2001, they narrowed the list of vendors down to four and began the request for proposal process. Then in September of 2001, Hershey announced an Early Retirement Program that left their HR department sparse outsourcing the recruiting function couldnt have come at a better time with the selection of RES in February of 2002.

A month later, RES and Hershey began a complete assessment and analysis of the existing staffing processes and programs. Meanwhile, a team of three diverse RES recruiters was assigned to the Hershey program. Their task was to contact all hiring managers who had current job requisitions and determine where they were in the hiring process. The recruiters received approximately 75 requisitions within the first two weeks. Some of these jobs were in the final stage of the hiring process and required only administrative support, not RES recruiting expertisebut many did. A variety of recruiting strategies were developed to fill these requisitions with qualified applicants, including Internet postings, networking, the Hershey career site, and radio advertising.

Hershey also needed a fully-capable applicant tracking system (ATS). Such a system captures and tracks necessary data that allows reporting on a variety of performance initiatives such as time to fill, cost per hire, applicant source, etc. Understanding and reviewing these metrics is critical to evaluating the continuous design of a program and recognizing its overall success. The RES technology is amazing. It allows for a much more efficient flow of data as well as a quick glance at our performance initiatives, says Wolfe. I always know where we are excelling and where we have opportunities. Utilizing the information being gathered from the ongoing procedural assessment, the technology team began collaboration with Hershey to launch the development of a fully-customized ATS system.

Within five months, the system had been tested and was ready for launch. With the new system, hiring and HR managers would have the ability to input their open requisitions into the system, candidates and applicants would be managed, and RES dedicated recruiters would then review and interview qualified applicants to filter down to the top three to five, best fit applicants for hiring managers. With the entire recruiting process now online, all applicants (internal and external) could be reviewed in a single system. Managers were now able to review completed job applications, online questionnaires, and recruiter interview notes all in the new ATS. Applicants are fully processed through to the hire, and then all data is transferred to the Hershey HR database. Once a requisition is closed, the process does not end. The hiring manager would receive an e-mail alerting him or her to complete a customer survey on their experience with the system as well as the recruiter. Because retention is key, a survey is also sent to the new hire at three- and six-month intervals to track their performance and experience in the job.

During the first year of the relationship, the RES Hershey Talent Team assisted Hershey in managing and filling more than 400 positions. RES and Hershey agreed that the first year would be used to gather the data necessary to set a benchmark for future measurement and process improvement. With reductions in cost per hire of more than 30 percent and a reduction in time to fill of more than 19 percent, the new Hershey/RES recruitment solution was successful in its first year of implementation. Having one centralized process for all salaried hiring online, has moved Hershey into the forefront of the competition for talent, notes Wolfe. We have one central database so the hiring decision can be made more effectively, and we have full tracking and reporting capability as well.

Today, RES and Hershey continue to adjust the program as lessons are learned and improvement opportunities are recognized. Implementation of this system at Hersheys Chocolate World Visitor Center is planned for the future, as well as a planned migration to a new HRIS system, which is currently in development.

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Verity Finds True Savings With RPO

Case Study: After a major acquisition, this software company acquired some help for its hiring staff.

by HROT Staff

Verity Inc. is successful in enabling organizations to maximize the return on their intellectual capital investment with intellectual capital management (ICM) solutions, but they were in need of a hiring solution in the form of RPO. During Veritys formative years, the software developer managed their talent acquisition through a combination of in-house recruiting resources and external agencies. In early 2004, Verity acquired Cardiff Software. The purchase created new complexities around process, systems, geography, and culture. Further contributing to this complexity, Veritys tenured internal recruiting staff departed from the organization. Verity was left with a significant number of open positions, and largely dependent upon generalists and hiring managers to fill open positions with the support of external resources. Veritys cost per hire was estimated to be in the range of 17 to 19 percent (the national average is 14.6) with no tracking of metrics associated with hiring manager satisfaction or time required to present or hire candidates. Verity had more than 20 open jobs that were critical, with an additional 20 open positions across the organization. They turned to Accolo for help.

In January 2005, Accolo and Verity executed a long-term contract with defined service level agreements (SLAs) and an additional on-site Accolo consultant who serves as the program manager. The implementation of SLAs ensured Verity receives top-tier recruiting service. SLAs measured time to introduce the hired candidate, hiring manager satisfaction, candidate satisfaction, and cost-per-hire, and includes components related to quality, speed, and cost, and contains meaningful penalties and bonuses for results. Through Accolos unique recruiting methodology and proprietary enabling technology, Verity was able to reduce their recruiting costs to 8.8 percent of compensation hired, time to introduce to 5.2 days, and determine that hiring manager satisfaction had improved significantly. In less than two weeks, Verity had a complete integrated recruitment department delivering results on all jobs. This consisted of on-site staff, a technology backbone to drive referrals and manage all applicant tracking, inclusion of all candidate sources, and a high degree of hiring manager TLC. There was also a measurable reduction of agency usage, resulting in estimated cost savings of $175,000 in Q4 2004 alone. RPO introduced standardization of the recruitment process including diversity sourcing for all jobs and tracking for EEOC complianceallowing Verity to limit exposure to legal actions.

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