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Posts Tagged ‘outsourcing’

Outsourcing, ctd.

March 3rd, 2011 No comments

This post from Felix Salmon nicely illustrates my reservations about outsourcing. Salmon highlights a great LA Times article that details the problems Boeing has had with the 787 program. My favorite quote:

That’s not to say that outsourcing never makes sense — it’s a good way to make use of the precision skills of specialty manufacturers, which would be costly to duplicate. But Boeing’s experience shows that it’s folly to think that every dollar spent on outsourcing means a cost savings on the finished product.

RPO customers beware.

Outsourcing and the Recruiting Function

February 2nd, 2011 No comments

Kevin Wheeler had an interesting post last week on ERE about internal recruiting teams vs. recruiting process outsourcing firms. It’s a good thought experiment about the value that internal recruiters bring, but I’m skeptical that RPOs will make the kind of headway that Wheeler’s piece suggests it could.

I began recruiting at an agency that supported a large outsourcing contract Compaq had with Microsoft managing one of Microsoft’s data centers. I barely knew what recruiting was when I started, so I didn’t question the arrangement, but as I started to get a clue and understand a more about IT, the contract struck me as odd. Wasn’t Microsoft a company that made products for data centers? Wouldn’t they have the knowledge to manage their own systems? More to the point, wouldn’t they want to keep that knowledge sharp?

I feel a little vindicated in my skepticism, because outsourcing hasn’t meant the wholesale elimination of internal IT functions. I think RPO will go the same direction, and here’s why:

  • Outsourcing is harder than it looks. Wheeler elides this point when he mentions “tough performance-based outsourcing agreements”. A business analyst I worked with said it well: to outsource something successfully, you need to know it inside and out. If organizations are struggling to get the most out of an internal recruiting function, they’ll struggle to work effectively with an RPO vendor.
  • Recruiting is too squishy. If create a process map of the hiring process, it looks pretty transactional and therefore easy to outsource. But navigating the Rorschach test of “culture fit” in any organization is subtle, and requires judgment and critical thinking. In my experience, outsourcing vendors have a hard time with those kinds of things.

This isn’t to say that RPO doesn’t have a role. Corporate IT has evolved so that most medium to large sized companies outsource some functions–typically commodity level, low value added activities. I think recruiting will do the same.