Running the Global Recruiting Machine

August 9, 2006
To kick off the 2006 May 1 Labor Day celebrations in the Philippines, President Gloria Macapagal-Arroyo motored over to the Starbucks in Pasig City outside Manila for coffee with six of ClientLogic’s 3,000 Filipino call center employees. ClientLogic, one of the world’s largest BPO providers, spreads its global workforce across 49 facilities in 14 countries.

    The company is a recruiting powerhouse that pulls in 15,000 to 25,000 new employees a year to maintain its current workforce of 22,000 and staff new sites for rapid global growth.

    "Because our most distinguishing characteristic is the quality of our agents, recruiting is a core competency for us," says Dale Saville, ClientLogic’s executive vice president of corporate services and chief global HR officer.

    ClientLogic keeps all recruiting in-house. A small team at corporate headquarters in Nashville oversees the global process and sets best practices for local teams of two to six recruiters at each site.

   "We see a significant advantage in having this global team to drive the recruiting process and ensure consistency," Saville says.

   ClientLogic moved into the Philippines two years ago to tap the abundant supply of English-speaking workers. The Philippines turns out 350,000 college graduates annually and is now a major player in the BPO market. In her Labor Day remarks, Arroyo noted that call center employment in the country has mushroomed from just 2,000 workers in 2001 to more than 100,000 today. She projects that the industry will employ a million Filipinos by 2010.

   ClientLogic is now actively scouting additional sites in second-tier Philippine locations.

   "For all our sites, the precursor to the heavy lifting of recruiting is a detailed labor market analysis that includes research on workforce demographics, unemployment rates, wage levels and information about competitors who may be pulling from the same applicant pool," Saville reports.

   Perfecting its global nine-step recruiting process and moving beyond first-tier cities lie at the heart of ClientLogic’s "right shore" capabilities and its stellar 95 percent customer renewal rate.

Nine-step staffing
    ClientLogic’s customer care centers bear the same structure in every country, with identical positions in each location. The company uses media ads, job fairs and college recruiting to generate applicants. Its Web site provides a detailed online application, but 80 percent to 90 percent of all applicants are walk-ins who complete the online application at the local site. The company manages applications with its Lawson HRIS program to complete an initial screening and route applications to recruiters at each facility.

    ClientLogic recruiters from Ireland to India use a consistent nine-step process based on the company’s best practices worldwide. The beauty of the process is that it involves recruiters from the preliminary needs analyses all the way through the new hires’ first months on the job. Continuous feedback coordinated through Nashville generates ongoing improvements for recruiting worldwide.

    The first step in the recruiting process is a specific analysis of the requirements entailed in ramping up for a new client. This determines the particular outreach techniques and job qualifications that ClientLogic recruiters use. Then the relevant applicant pool is pulled from the company’s online applicants and processed through an automated scoring system. Recruiters conduct telephone screenings to evaluate the selected applicants’ speech and verbal skills.

    "Applicants who pass the phone screening are invited to the site for a job preview, which includes videos about the company, the typical workday and simulations of phone calls that represent the good, the bad and the ugly in call center work," Saville reports.

    After the videos, applicants attend a Q&A session with a ClientLogic employee who has been hired within the past year.

    "We see the job preview step as a very important part of self-selection," Saville says.

    Applicants who choose to continue take a series of technical, behavioral and psychometric tests.

    "We look for a ‘can do, will do’ fit," Saville notes.

    The next step is a face-to-face behavioral interview with an HR manager at the site.

    "We have concluded that we are better served by interviews with HR managers rather than operational managers," he says.

    At this stage, the recruiters run background checks and other tests that may be required by specific clients--for example, credit checks and drug tests.

    The seventh step is tendering the offer.

    "We put great emphasis on the offer process as an opportunity to welcome new hires to the company and reinforce the message that we want them to work here," Saville says.

    The next step is onboarding, which ClientLogic views as an integral part of the recruiting process.

    "Involving the recruiting team in onboarding helps them improve the front end of the recruiting process," Saville notes.

    Onboarding includes 11 training modules for TLC ("think like a customer") skills plus two to four weeks of technical training.

    The final step in the process consists of 45-day and 90-day "reunions" conducted by the recruiting team to collect feedback from new hires on the recruiting and onboarding process. The team also uses these meetings as an opportunity to troll for new applicants.

    "Employee referrals now account for 20 percent of our new hires and generate stronger candidates than other means of recruiting," Saville says.

    Company policy precludes same-day hires.

    "The practice attracts job skippers," Saville explains. "In call centers, we are working at the lower end of the wage scale and we don’t want the work habits of job skippers. We believe that same-day hiring is not conducive to attracting serious applicants and maintaining stickiness."

Second-tier recruiting
    ClientLogic recruiters, along with other recruiters in the $26 billion customer care outsourcing industry, are shifting their focus to second-tier cities because of rising wages and turnover in the first-tier locations. ClientLogic spearheaded the move to second-tier cities in the Philippines when it opened a call center in Baguio City, 120 miles north of Manila, in January 2005.

    Baguio is home to 100,000 university students. Wage rates are one-third lower than in Manila, and ClientLogic is already recording lower attrition at the new site. Three other companies have opened call centers in the city since ClientLogic paved the way.

    ClientLogic has felt the effects of labor shortages in its other first-tier locations such as Bangalore, where the company employs 2,500 workers. India leads the world in the offshore call center market with 350,000 agents employed. Analysts at McKinsey warn that the supply of call center agents in India and the Philippines could be exhausted in five years, but Saville believes that speculation about labor shortages applies only to the first-tier cities.

    Job boards post hundreds of listings for India and the Philippines, including "urgent" ads for positions at Citigroup and other U.S. multinationals. An entry-level call center agent averages $1.95 an hour in Bangalore and $1.88 an hour in Manila, a huge cost advantage versus pay rates averaging $12.64 an hour for the same position in Seattle or $12.72 in Los Angeles, according to a cost analysis by the Boyd Co., a site selection firm.

    Recruiting costs outside the United States are lower as well. The average number of applicants needed to recruit one agent ranges from 29 in North America to 20 in Asia/Pacific, 18 in Europe and seven in South America, according to a benchmarking survey of 385 call centers by Contact Center World.

    "Bangalore and the center of Manila are experiencing higher turnover, but this will abate as employers will eventually stop bidding up wages and move to second- and third-tier locations in rural areas such as Baguio that have lower attrition and lower wages," Saville says.

    ClientLogic is now looking at Calcutta in India and additional second-tier sites in other Asian nations, the Caribbean Basin, South America and southern Africa.

    "We are well-established in Morocco, but we are ready to consider sub-Saharan countries," Saville notes.

    Datamonitor, a business analysis and forecasting firm, predicts that the number of call center agents in North Africa will triple by 2010 to about 23,000. In South Africa, call center positions are expected to more than triple to 7,400 by 2010. Botswana is also emerging as a new offshore possibility.

    ClientLogic opened a new center in Panama and expanded its center in Mexico in 2005. Datamonitor notes that Mexico will remain an offshore contact center location of choice for U.S.-based companies because of the growing Hispanic population in the U.S. and rising incomes among Spanish-speaking households.

    Argentina and Chile are aggressively pursuing call center business from the North American market, as are smaller countries, including Costa Rica, the Dominican Republic and Panama. Datamonitor’s most recent studies predict that the number of call center agents located in Brazil servicing offshore customers will rise from 3,900 in 2005 to 11,500 in 2010.

    The number of call center agents based in Central and Eastern Europe will more than treble from 1,900 in 2004 to 6,400 in 2008. Agents in Hungary earn an average of $12,192 a year, compared with $34,920 in England, according to BeesWax Europe, a multilingual recruiting company.

    Although labor arbitrage dictates the broadest trends in the global call center industry, U.S. companies continue to expand centers at home to serve clients who need or prefer domestic locations. ClientLogic opened new centers in third-tier U.S. locations last year. Within its North American centers, ClientLogic will attempt to turn the aging workforce to its advantage.

    "Labor force segments are maturing in the U.S. and Canada as baby boomers retire and then look for new careers and supplemental income," Saville reports. "We are looking at this alternative workforce of senior citizens, possibly for at-home work."

    For labor-intensive industries such as customer contact services, controlling workforce staffing costs means pursuing low-wage locations around the world and within each country. The difficult marriage of flexibility and consistency captured in ClientLogic’s approach meets the challenge of recruiting in highly competitive and rapidly developing offshore markets while maintaining a cost-effective base at home.