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Cost-Conscious Firms Find India Offers a Down-Home Recruiting Touch

April 19, 2009
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Related Topics: Global Business Issues, Outsourcing, Workforce Planning, Featured Article, Recruitment
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Martin Webb, whose real name is Milind Thite, spends his nights in Pune, India, recruiting software engineers and systems analysts for U.S. job openings at TEOCO, a network cost optimization company based in Fairfax, Virginia.

Webb has a TEOCO e-mail address, a 703 Virginia area code and a TEOCO signature line. He works full time for TEOCO, but he is employed by iPlace India Ltd., a division of iPlace USA Inc., an offshore recruiting firm with headquarters in Vienna, Virginia, and a recruiting center in Pune.

"Martin represents himself as a TEOCO employee, and job candidates have no idea that he is working from India," says Judy Graham, TEOCO’s director of human resources. Webb has access to TEOCO’s Monster and LinkedIn accounts and its applicant tracking system. "Any resource I have, he has," Graham says.

TEOCO pays iPlace a monthly retainer of $2,200, or $26,400 a year, plus a $600 placement fee, under a one-year service agreement that covers candidate sourcing and prequalification, iPlace’s midlevel offering. "I can’t hire a recruiter for $26,400 a year," Graham notes. "We were paying contract recruiters $60 an hour, which comes to $124,800 a year."

In fact, the iPlace fee is less than half of what TEOCO might expect to pay for a full-time in-house recruiter and less than one-fourth of what it might pay for a U.S.-based contract or agency recruiter. "We are getting the same support that we would from a U.S. recruiting services firm but at a fraction of the price," Graham says.

And Graham is thrilled with Webb’s performance. "Martin is truly my partner," she says. "He has improved my results." They maintain constant contact throughout Graham’s workday, primarily through instant messaging.

TEOCO is one of many U.S. companies using offshore providers to slash recruiting costs. The economic downturn has accelerated the trend toward offshoring a range of HR services to gain near-term cost savings, according to new research from the Everest Research Institute. Everest also notes that in a downturn, buyers typically prefer single-component agreements that leverage labor arbitrage rather than broad multi-service offerings.

Offshore recruiting firms now include U.S.-based companies with recruiting centers located overseas, such as iPlace, and foreign firms based in India, the Philippines, Singapore and Argentina that offer services directly to U.S. clients. These firms provide back-office recruiting services to support in-house recruiters at U.S. companies and recruiters at U.S.-based staffing and recruiting firms

Prequalifying in Pune
TEOCO provides network cost-optimization services for communications companies such as AT&T and Verizon. The company employs 210 workers at three U.S. locations, plus three workers in the U.K. and 30 in India. The India unit handles its own hiring. Webb sources and prequalifies candidates for all TEOCO technical jobs in the United States.

The company typically has 10 open positions at any time and hires an average of 50 new employees a year. "We are not a high-volume company," Graham says. "But we are extremely selective in our hiring. Our differentiator is expertise, so positions can be difficult to fill. There are very few people who know our niche in the telecom industry. It’s like looking for a needle in a haystack."

Webb holds a bachelor’s degree in commerce and is a Microsoft Certified Professional. He is also a graduate of the iPlace Academy, a two-month program that provides training in accent neutralization, sourcing and interviewing techniques, and staffing industry business practices.

When Webb became TEOCO’s designated recruiter in January, he underwent additional training in how to sell TEOCO and its unique culture.

Webb now automatically receives applications directly from TEOCO’s job postings. He reviews the résumés, checks for specific technical qualifications and assesses candidates for cultural fit, which includes TEOCO’s preference for candidates who have been long tenured in their previous positions.

Webb then calls suitable candidates for a lengthy technical phone screen and writes a summary of the results for Graham and the hiring manager. He speaks directly to hiring managers when necessary. TEOCO outsources background screening to ADP, but Webb checks references.

When Graham receives a résumé directly, she forwards it to Webb. "He reviews it and comments on it, pointing out the candidate’s particular strengths and weaknesses," she says. "He’s teaching me how to be better at screening résumés."

Graham and the hiring managers conduct face-to-face interviews with the candidates who survive Webb’s detailed evaluation. Webb notifies candidates about any changes in the open positions, does some interview scheduling and notifies candidates of the hiring decision. Graham makes the job offer and negotiates the details of the package.

The company has filled two positions since the iPlace contract began January 19 and has additional candidates moving through the hiring process. From January 19 through the end of March, Webb prequalified 87 candidates; 46 percent were approved by hiring managers for interviews.

"This is a high approval rate for us," Graham notes.

All of the delays in hiring occur stateside.

"We have a very long recruiting process, with several rounds of interviews and frequent delays in the hiring manager interviews," Graham says. "Our CEO also interviews every candidate, so this adds more time to the process."

Cost-based decisionn
Before Webb came on board in January, Graham shouldered a large part of the recruiting work for TEOCO. The company operates on a profitable debt-free model that demands maximum results from every employee.

"We manage our costs within our revenues and we run on a very lean basis, so I run all of HR with one other employee and we work as fast as we possibly can," Graham says.

Graham typically posted openings on job boards but was increasingly overwhelmed by time-consuming recruiting tasks, particularly for technical job openings.

"If I posted a Java position, I was swamped with résumés and I couldn’t keep up the pace," she reports.

Last year, TEOCO brought in a contract recruiter to take the burden off Graham.

"It was a bad experience," she says. "After he had been here for two weeks, I told the CEO I wanted him out. I told the CEO that I would rather work nights and weekends than deal with the contract recruiter."

TEOCO’s CEO, who was familiar with iPlace, suggested that Graham explore the firm’s offshore offerings.

"I had reservations and thought it would take more work to explain the jobs and the company than it would be worth," Graham says. "But iPlace was very proactive and did extensive preparation work well before the January 19 start date."

TEOCO does not use U.S. recruiting agencies because of the cost and what Graham describes as a lack of added value.

"The decision to use an offshore firm was a cost- and value-based decision," she says. She receives daily updates on Webb’s work and weekly metrics reports with detailed information on all job candidates and their status.

"The CEO has seen the benefits of the offshore recruiting services," Graham notes. "Martin has freed up my time by hours and hours."

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