As you may or may not know, the world headquarters of the HR Capitalist and Fistful of Talent is the lovely city of Birmingham, Alabama, with roughly 1 million people in the metro area. Great town – I'm not from the Magic City, but my wife and I came to Birmingham right out of undergrad and are approaching the 18 year mark in Birmingham, so it's now home.
Now to the topic – as you might expect, outsourcing to India is alive and well in Birmingham. The usual suspects are in play – corporate citizens to the Birmingham community, outsourcing call centers to India, tech firms outsourcing development coding to Bangalore. All the things you expect, because where there is business, there'll be outsourcing.
But let me say this – if the job of a full life cycle recruiter for the Birmingham market can be outsourced to India, outsourcing has gone to the next level. And it's happening in Birmingham.
Why's this on my mind? 2 reasons:
1. I had a lunch a couple of weeks back with a technical recruiting group (developers for the software industry, etc) I hadn't met before, put together by a connection from my past I hadn't seen in awhile, who was now part of the recruiting firm in question. I asked a couple of questions and was shocked by their business process. More on that below.
2. This article at Workforce Recruiting, focused on offshore competition for the American recruiter.
So, here's what I found out in the lunch with the recruiting firm in question, which I consider to be a pretty sharp bunch. They've long used outsourcing as a means to "source" candidates, but they've now moved to the next level. In addition to sourcing candidates using resources in India, they've also handed off the next level of activity to outsourced recruiters in India. That means outsourced recruiters who understand the technologies in play are making the initial calls to prospects, qualifying them, and locking them down for the next step, which might be a phone screen or in-person with the actual recruiting firm, or if the specs are nailed, a phone screen or in-person with the client company in question.
Here's the kicker – low cost, robust technologies like Bullhorn, which allow recruiting shops to manage the lifecycle of the recruiting process for a single candidate from anywhere on the globe, have enabled the manager in question to outsource this function. All he needs is the right talent overseas, and he pays 20-30% of what he would pay a full life cycle recruiter located in Birmingham to do the same job.
And in a recruiting world where technical candidates are used to getting 5-10 phone calls a week from search firms, hasn't that initial call turned (at least somewhat) into a commodity? The firm in question dramatically reduces their cost structure and then there's the real kicker — they feel like they get twice the work for one/fifth of the money when using an Indian recruiter, who by the way, is working crazy hours so they can be available when the Birmingham, AL candidate pool is up and working.
Crazy times my friend, with this lesson. If you are a recruiter working for other people, you better be really good as globalization continues.
I'm not saying it's right, I'm just saying it's real…
You aren’t saying that it’s right. Are you saying that it’s wrong? Are you thinking that it’s right but not saying it?
Speak your mind, KD!
If what you are saying (whether a suggestion or an observation) is true, then the off shoring of second-level recruiting could have a profound impact on two levels.
First, US-based Recruiters would need to relocate to India to find work. Next, even though the technology allows for global candidate management, the people employing this practice would need training, policies would need to be revised and candidates would need to get on board.
I believe there is value in this practice, but the adoption rate will be slow due to the people aspect of recruiting. Unlike developing, coding and other IT processes, recruiting is still very much a “people” business.
It is real, but in my prediction it won’t be real big for a long time to come – if ever.
Totally agree with you Steve. Plus, with all of the negativity associated with using overseas talent, it will hopefully be a long time, if ever, before it becomes a major issue for us Recruiters. What U.S. company today would run the risk of associating themselves with this negativity anyway?
To All, Thank you KD, you rock. Being a Corporate Recruiter and long time (I am old) Sales professional, I can tell you that the majority of the cold calls I am getting are from off shore recruiting firms, either firms that have US offices or firms that are “virtual”. I also have 2 partners that have outsourced their entire recruiting efforts to off shore firms. Now, I do not really care who recruits my candidates as long as they are qualified BUT, I do like a local rep, and to have the recruiters in the states so I can communicate requirements to them directly. Yes, most of the firms shade their recruiters from the client but my partners know that at times, I want to question the person who spoke directly with a candidate and find out particulars about the person and or the situation. I also train,(yes, I hold training sessions on “why someone should work at my company” to give the recruiters information on why my company is different and to set me apart from my competitors).
Truth be told, as with the outsourcing that went on in the last 5 years or so, we are finding that the overall savings are much smaller than many people thought due to communication and other issues, including a workforce in India that is maturing and becoming more expensive (thank you capitalism). Keep on trukin KD
The firm I am contracting with right now outsourced their recruiting to India. I was skeptical at first but they got me a job so I can’t really complain.
At what level? I recruit senior level executives and nuclear professionals. We gave a handful of firms overseas a shot last year and got zilch. I think it is less of a resource, if you have a very specific niche or are recruiting at senior levels…
Okay, now I think I understand: The time has come for me to do my splits with recruiters overseas — where I take 65% and they take 35%, which would be a 16.7% improvement over their current best-case (30%) fee arrangement.
No, wait! I forgot. They don’t do contingency deals …
Harry Joiner
http://www.linkedin.com/in/marketingheadhunter
Please stop the BS of outsourced recruiters; I get 3-5 calls/emails every week from some outsourced recruiter in India pitching technical jobs to me based on my old resume because they can’t discern the difference between a recruiter and a software engineer. If thats my competition then that’s the best economic news I heard in a long time:)
Detroit ignored Japanese automakers for decades. “Couldn’t understand the needs of US customers”, they said. For awhile they were right. But they learned.
US Manufacturers of TVs looked at foreign makes and declared them cheap imitations. “Couldn’t meet our quality standards”, they said. For awhile they were right. But they learned.
Dejavu all over again. In 5 years I believe 50% of the recruiting leaders working for American multinationals will not reside in the US.(Read “decision makers” when you see the word “leaders”.)
You can take my prediction to the bank as long as US staffing professionals, staffing firms and company recruiters compete by dissing the competition instead of rising to the challenge with comparable if not superior discipline, education, and standards.
The Workforce article and Kris’ blog ought to be a wake up call.
Your industry/ job is not the only one being affected by the outsourcing of jobs in India. My own job as an ANTI-MONEY LAUNDERING ANALYST is being shipped to India. It costs STANDARD CHARTERED BANK $2,000 per month to pay about 20 people to work as Compliance Analysts.
This is our reality and it is UNAmerican!!!
Please explain to me how criticizing outsourced recruiters equates to us not valuing discipline, education, and standards in the recruiting industry. We just disagree with the article.
Red Sox fans can bash Yankees fans and still celebrate the win and honor baseball. Hey, 50% of staffing should reside outside the US because more than 50% of the world’s workforce already does:) Recruiting is not like building cars its sales, marketing, and chutzpah!
The only comment I have is that as someone looking for work it is very annoying when I am called from someone residing in India. They do not speak American English. I do not understand what they are saying and the majority of the time there is some sort of delay over the phone. I’m beginning to get used to it, but not sure if I will completely. Can our US businesses not afford to hire our own? Or are they just too greedy?