Innovation, learning, and patience lead the way for companies to survive and even prosper in these lean economic times.
In the January/February issue of this column, I predicted the recession (no mean feat, we were already entering it) and its effects on the HRO market. I predicted a period of paralysis followed by a period of intense activity.
I also predicted that there would be moderate but continued growth for the RPO and SaaS HR technology players; Wall Street analysts had predicted “Armageddon” for RPO and SaaS recruitment technology providers, but the meltdown has not happened. Most staffing executives know that while there may be more candidates available in a recession, screening and selection are a big part of the value proposition of these companies.
In fact, all employers are chasing the same top 10 percent of the talent pool. Most of these Wall Street talking heads have never worked in the industry and do not understand this. If these analysts are not getting regular calls about other jobs, they are probably in the bottom 90 percent anyway.
There is a war for talent, and it will only intensify as the wave of retiring baby boomers drives knowledge worker recruitment into high gear. I have heard that record numbers of RPO RFPs are out in the marketplace after a relative slowdown. Hiring or “success fees” are down, but according to RPO leaders, new deals continue to flow.
HRO providers and—more importantly—buyers are stunned by the volatility of this correction and the corresponding decline of shareholder equity and pending signs of consumer weakness. Travel budgets and discretionary spending have been slashed or in some cases frozen. Plans that have been made are suspended, and like the Simon and Garfunkel song, “a nation turns its lonely eyes” to whom? Leadership has certainly been lacking both nationally and globally.
The market meltdown is a bit unique, but it has happened. We have lived through this before, and we will survive. In times like this, leaders need to lead. Leaders need to try new things, learn new strategies, and develop better ways of doing things.
Shared Xpertise Forums has reset the agenda for the HRO World Europe conference (November 18 to 20) to address the global economy and its impact on this industry. The focus will be on steps companies can take that will have an immediate, positive impact on bottom-line performance with respect to HR spending. Attendance costs have also been restructured and simplified.
We are also reworking the content for the RPO Summit, December 11 and 12, to address these pressing issues. We believe that HR leaders will continue to fight and win the battle for their own training and development to attend these opportunities to learn. The economy will heal, and companies looking to thrive in the current market conditions must arm their HR leaders with the tools to address both fiscal and HR programmatic needs of their workforce.
The market will survive, and the HRO industry will survive. In many cases it will thrive. For HRO buyers to get the best opportunity for value, they must know what cutting-edge options exist. Warren Buffett commented recently on equities and made the point that timidity is not the best approach for long-term success. HRO is a long-term decision, although there are short-term benefits to be gained. We hope the HR leadership of many companies will join in the current economic conversation.