he disappearance of jobs because of the poor economy is cutting into some U.S.
companies’ recruitment process outsourcing endeavors, but the damage isn’t across
the board and plenty of bright spots remain, according to employers and RPO vendors.
While some companies with existing RPO contracts have trimmed
hiring from expected levels for the rest of 2008, those deficits are being made
up for by companies in industries that remain unaffected by hard times.
The economy has not dampened recruiting efforts at AstraZeneca
or its contract with RPO vendor the RightThing, which the Wilmington, Delaware,
pharmaceutical manufacturer initially used to bump up its sales force by 800 representatives
last year.
Things are going so well that AstraZeneca expanded its initial
contract with the RightThing to cover business-as-usual hiring in sales as well
as sourcing for non-sales positions at the director level and below, according to
Bill Warner, the company’s U.S. sales recruitment manager.
Economic woes aren’t affecting pharmaceuticals and other growth
industries, or industries such as retail that have high turnover and need to fill
jobs no matter what, says Rebecca Callahan, RPO senior vice president at Spherion,
an RPO industry leader. "They’ll look at outsourcing because it’s a more cost-effective
way to do it," she says.
By contrast, RPO contracts in certain fuel-dependent industries,
such as the airline business or tourism, have been hit hard, Callahan says. Because
rising fuel costs have hurt their business, "Companies that thought they needed
to hire 100 people now need zero, but five months from now they may need 500," Callahan
says. Shifting recruiting work to an outside vendor is one way to smooth out those
drastic swings, she says.
At Aon, an HR outsourcer that provides RPO as part of an overall
HR outsourcing package, current clients are forecasting decreases in hiring activity,
says Pat Tomlinson, the company’s RPO division practice director. But there’s no
corresponding decrease in the level of interest that potential clients are showing
in RPO, Tomlinson says.
That’s especially the case for companies looking to fill jobs
for IT, engineering and senior-level sales professionals. The U.S. unemployment
rate is holding steady at 2 percent to 2.5 percent for such jobs, says Chris Kilpatrick,
vice president at CDI Talent Management, a recruiting and RPO specialist and sometime
partner of Northgate/ Arinso, a global HR outsourcing specialist. Companies "are
looking for an RPO partner who can go out and find those people globally because
the demand is so high," Kilpatrick says.
Any contraction in the U.S. job market is being countered
by growth elsewhere, Kilpatrick adds. "Customers are pointing us internationally
to the Asia Pacific region, where their growth is very robust," he says.
For every potential customer that’s holding off on possible
RPO projects because they’ve stopped hiring, there’s another that’s ready to sign
on because they’re restructuring or moving quickly into a new low-cost product area
and need to staff up quickly, says Johnny Ramondino, Northgate/Arinso’s senior director
of business development. RPO "is starting to prove recession-proof," Ramondino says.
For HR departments, RPO is a good way to weather an
economic downturn, because instead of making recruiting a fixed cost, employers
can pay as they go, says Lisa Rowan, HR and talent management services program
director at market researcher IDC. "You have hedged your bets a little," she
says.
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