'RPO is for the enlightened'

10 December 2008:

It had to happen. First, they outsourced manufacturing, and then services. Now they do not want to recruit or nurture talent. In comes recruitment process outsourcing, or RPO. Shambhavi Chauhan spoke with Robert McNabb, executive vice-president, Korn/Ferry International, and CEO, Futurestep (an RPO firm under Korn/Ferry), on the changing HR scenario. Edited excerpts:

How is the HR fraternity affected by the current downturn?
Each time there is a downturn, and this can be traced back to the last three or four downturns, we have seen a trend of companies revisiting how they operate and looking at their strategy in terms of preparation for the future. But the current downturn is unprecedented and a number of companies are asking the fundamental question: Do we “in-source” or “outsource”?

In other words, companies are thinking if they should groom talent in-house, or perhaps find a strategic partner which can architecturally design and customise the recruitment process to improve results. That is, engaging a recruitment processing outsourcing (RPO) firm to design a process which is best for a company to acquire, groom and retain talent. The challenge of acquiring and retaining the right talent has brought the HR fraternity to prominence.

Do you see recruitment process outsourcing gaining ground?
The RPO industry is undergoing a transformation, and from an evolutionary standpoint, it is changing dramatically. There is significant opportunity for growth in this industry because a lot of companies are seeking RPO solutions for outsourcing processes and technology along with some HR functions which are a part of the recruitment process, versus just engaging an enabler for outsourcing recruitment. RPO is the way forward for the HR community. It is driven around talent acquisition and talent management, and is certainly one of the hottest topics in the HR space.

How are the HR function and community changing?
We will see much more specialisation within the HR space. More “thought leadership” around specific HR functions will help companies to acquire, develop, retain and reward employees in a better way. Companies will need to have HR departments that are more strategic in nature, and that understand the demographic challenges and the limitations of individuals. The HR community needs to get more strategic, which is not the case today.

HR professionals need to upgrade and position themselves to be more strategic than tactical; they need to understand the difference between tactical HR and strategic HR.

Do these changes have something to do with the changing nature of workforce?
Yes, of course, they are directly tied. The changing nature of workforce is the primary reason for HR becoming more strategic. The demographics in the industrialised nations — the US, UK, Germany, France, Australia and so on — has changed significantly. Population in these countries is shrinking dramatically and US companies are recruiting as many people from India as they can. I can tell you, all of the multinationals we are working with, want to recruit more engineers from India. So what does this mean for the Indian employer? There appears to be an onslaught to hire engineers from India for other places because there is a shortage. This, in turn, might create shortage here in the country.

As a case in point, many of our Chinese clients want us to bring in engineers from India. Apparently, it is all about the changing workforce. There are dramatic demographic changes happening around the world.