Recruiting Goes Back In-house at Bank of America
In a unique move, Bank of America is bringing its recruiting back in-house after having outsourced the function for the past four years.
Bank of America’s decision may seem counterintuitive given that many companies are in the midst of outsourcing their human resources functions. But industry experts say that the bank found itself in a very unusual situation.
After merging with FleetBoston Financial in 2004, the bank was left with two human resources outsourcing providers. Bank of America had a 10-year contract with outsourcer Exult, which was acquired by Hewitt in October 2004, to handle all of its human resources processes, including recruiting and staffing. Fleet, meanwhile, had signed a seven-year contract with Fidelity earlier in 2004. Under that agreement, Fidelity provided Fleet with administrative support for its human resources operations, payrolls and benefit programs covering about 250,000 employees and retirees.
As part of the compromises made during the merger of the two banks, Bank of America agreed to use Fidelity as its human resources outsourcing provider, says Naomi Bloom, managing partner at Bloom & Wallace, a consulting firm in Fort Myers, Florida.
“It had nothing to do with Exult’s capabilities,” she says. At that point Bank of America could either outsource its recruiting and staffing to Fidelity as well or bring it in-house. The bank chose the latter. “Fidelity does not have the same recruiting capabilities that Exult has,” Bloom says. “Until or unless Fidelity can do that, Bank of America had no choice.”
Jenny Engle, a Fidelity spokeswoman, says that Fidelity does offer staffing as part of its human resources outsourcing package, but she declined to comment further on Bank of America’s decision.
Tara Murphy Burke, a Bank of America spokeswoman, also declined to comment on why Bank of America was bringing the recruiting function back in-house, but she confirmed that the bank expects to grow its human resources staff from 1,200 to 1,500 as a result of the move.
Industry experts agree that the Bank of America decision will remain unique even as more human resources outsourcing contracts come up for renewal, says Michel Janssen, managing research director at Everest Group.
Recruiting is usually one of the last functions a company outsources, largely because of the importance that corporate culture plays in hiring. But once companies outsource recruiting, they usually stick to it, Janssen says.
“For the most part, if companies are unhappy with their suppliers they change suppliers, but they aren’t bringing it in-house,” he says.