ust back from a whirlwind trip exploring trends in Europe, HRO Todayâs publisher rediscovered three developments, all of which point to heightened market activity in the years to come.
You want to be reminded how nice it feels to sleep in your own bed? Then try a 48-hour round trip from New York to Brussels to Amsterdam to London and back to New York. Sure, catching 40 winks in that 747 business-class seat is better than a nap in the back seat of a Ford Cavalier. But doing it for two out of three nights is damned uncomfortable. Add six intense business meetings in the middle, and you’ve got a recipe for career spasms.
Speaking of discomfort, HR leaders in Amsterdam, Brussels, Paris, and London uniformly use the term “HRO” but think it fits a bit snug. In polite corporate companies across the Pond, the preferred term is “HR transformation.” HRO and HR transformation are often interchangeable. But because such a large number of businesses in EC countries are highly unionized, the concept of outsourcing is still remarkably emotional.
The week of March 7 was filled with union unrest across Europe, mostly over outsourcing proposals. In Paris, the massive Front Ouvriere syndicate, or FO, staged huge protests over proposed outsourcing and layoffs at EADS and Aerospatiale, makers of that giant new passenger plane. In the U.K., strikes were threatened at Royal Mail over use of outside contractors. And in Holland and Belgium, we counted seven different unions or works councils on the verge of walkouts.
While on the road, we re-learned that three big trends in HRO are alive and well.
• First, Brits, Americans, and Canadians still lead the way in HR innovation using HRO. The reasons are largely cultural. The world’s top theorist for why they have been and will continue to be HRO leaders is Dutch Professor Geert Hofstede from Holland’s Maastricht University. His theory is that cultures have five attitude dimensions that determine acceptance of new trends such as HRO:
• Their attitudes on distribution of power;
• How much they value individualism vs. collectivism;
• Whether the culture is masculine (aggressive, assertive) or feminine (modest, caring);
• How much the culture avoids uncertainty; and
• Whether the culture takes a long- or short-term view.
Using Hofstede’s paradigm, Brits, Canadians, and Americans—more than any other Western cultures—distribute power broadly, embrace uncertainty, value individualism, take a masculine approach, and act for the short-term. This combination creates an outsourcing-friendly environment.
Of course, there’s also the beer-versus-wine theory. In countries where they like beer (U.S., Canada, U.K, and Holland), they like outsourcing, and in wine-loving-places (France and Italy) they don’t. While booze preferences are entertaining, Hofstede’s concept (excuse the pun) holds more water. The reality is where Continental European firms compete directly with HRO-friendly American, British, and Canadian firms, they will overcome their cultural opposition to HRO.
• Second, Recruitment Process Outsourcing (RPO) is rocking and rolling its way across the globe. Hey, there are now more than 100 RPO vendors in North America and 45 in Europe, up from less than five worldwide in 2002. While in Brussels, we found a new one—enterprise HRO provider ARINSO has even gotten into the RPO game, recently landing a significant multinational client. Expect the cost-slashing, results-enhancing, technology-powered recruitment trend to continue.
• Third, the more HRO or HR transformation aligns with corporate responsibility, the more popular it will become. The corporate responsibility (read: climate change, good governance, social responsibility, and stakeholder accountability) movement has spawned a $31.7-billion market, according to CRO (Corporate Responsibility Officer) Magazine. For sure, Al Gore’s Academy Award for his climate-change movie “An Inconvenient Truth” has spurred a load of U.S. corporate activity recently. But the corporate responsibility revolution has been going on in Europe for at least 10 more years than in North America.
Advice for HRO brand-builders: bake corporate responsibility into your services. The result will taste great for many prospective customers.