BPO, CallCenter, Contact Centre, News, Offshoring, Outsourcing, theOutsourcing-guide

Are you talking to me?

Despite being the channel customers love to hate IVR (Interactive Voice Response) is still growing and is predicted to be worth $2.78 billion by 2017, according to a 2012 report from Global Industry Analysts (GIA)[i]. The growth is being driven by outbound IVR to deliver important notifications and proactive customer service functions.

IVR has had a mixed history, on one hand reducing call wait times and improving overall efficiencies and service levels, on the other, driving customers to switch to competitors.

We’re all familiar with the experience of having to navigate through a complex and confusing IVR menu to finally be put through to the wrong department or service or for the call to drop out. The experience leaves you frustrated. Badly designed IVR systems may have contributed to bad customer experiences more than any other channel.

Key areas in IVR development in recent years, that are altering the previous negative perceptions of this self-service technology, have been in Outbound IVR and Visual IVR.

Outbound IVR

Outbound IVR allows organisations to proactively and automatically engage customers through a variety of channels such as automated voice calls, SMS messages, email or social media posts with personalised communications. Providing immediate, faster and real-time information and services to customers Calls can range from personalised, event-triggered notifications and two-way interactions to broadcast messages to hundreds or even thousands of customers.

It can be used in a variety of situations including:

  • Sending emergency notifications,
  • Personalised offers and promotions
  • Travel-related notifications
  • Problem reporting
  • Change notifications (account status, billing, rates)
  • Shipping notifications

Visual IVR

Steve Morrell, founder and principal analyst of ContactBabel, an analyst firm for the contact centre industry, highlights how smartphones and tablets can give companies the option of offering visual representations of their IVR menus[ii]. This can enhance the customer experience as most people find it easier to read and select options in text and visual format than to listen to it being spoken.

Visual IVR presents customers with a menu driven interface to the IVR system which is available from a website or mobile app.  Visual IVR can be used to send video or push other content. This content can be educational or for marketing purposes or to assist the customer’s self-service requirement in some way.

Visual IVR allows companies to connect their traditional contact centre channels to new mobile platforms, enhancing their ability to serve customers. Visual IVR can be implemented with existing DMTF technology and IVR systems, requiring few modifications.

Originally Published in the Sauce eNewsletter – theOutsourcing-Guide.com

theOutsourcing-guide.com is the ultimate reference guide for the BPO and outsourcing industries and it will become the most comprehensive resource for organisations looking to engage BPO and outsourcing providers. As well as providing a range of eBooks, articles and whitepapers explaining the various aspects of BPO, theOutsourcing-guide.com provides an online directory of providers segmented by category and location.

theOutsourcing-guide.com is a vehicle for vendors and service providers to showcase their organisations and the outsourcing services they provide. Visit theOutsourcing-guide.com for more information.

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The Balanced Shore approach

By Mark Atterby

Most leading BPO and outsourcing providers are offering clients flexible outsourcing location options. Datamark research highlights that these location options include at-home; on-site; off-site within the same city; off-site at a lower-cost-of-living city; nearshore; farshore; and blends of these arrangements [i].

It’s all about finding the right skills at the right price and how you manage and integrate them to deliver improved services based on economies of scope. Each scenario has its benefits and disadvantages. That’s why most providers, certainly the larger and more established providers try to use a blended approach.

Global Delivery Model – onshore, nearshore, farshore

A global delivery model allows a BPO provider to access the best talent at the best price in relation to the tasks and processes that need to be managed. The more complex activities that need greater involvement or collaboration with the client may need to be managed by operations situated locally to the client. Tasks that are fairly straight forward can be offshored or nearshored to a cheaper location.

Nearshore options, though not as cheap as an offshore location, may still be cheaper than local operations where strong cultural alignment is necessary. Travel to a nearshore or regional location may also be easier.

Peter Monk, Country Manager from Concentrix, believes that you need to have local operations if you want to be a provider who wants to deliver true innovation and collaboration. To build the teams that need to work together from the different organisations, they need to be in fairly close proximity to each other.

Homeshoring

The deployment of home based agents or homeshoring has become popular over the last decade. It often means reduced costs for the BPO provider as home based workers often provide their own telephone equipment and computer systems. The provider also saves on the associated costs of office space.

Using home based agents that are local to the client and its customer base can overcome the prejudice that is sometimes created from regional accents, mannerisms and rates of speech. Regional government departments and local government may tend to favour providers who employ people in their region.

Home shoring gives people with disabilities, who may not be able to travel to a workplace, the opportunity to work.   Research has highlighted that employees with disabilities often have a higher staff retention rate, which saves recruitment and training costs[ii].

By leveraging the right balance of locations, allows providers to build high quality, flexible and innovative solutions for their clients, yet keep costs down.

[i] https://www.datamark.net/blog/10-business-process-outsourcing-trends-2015

[ii] http://www.dwa.org.au/advantages.htm

theOutsourcing-guide.com is the ultimate reference guide for the BPO and outsourcing industries and it will become the most comprehensive resource for organisations looking to engage BPO and outsourcing providers. As well as providing a range of eBooks, articles and whitepapers explaining the various aspects of BPO, theOutsourcing-guide.com provides an online directory of providers segmented by category and location.

theOutsourcing-guide.com is a vehicle for vendors and service providers to showcase their organisations and the outsourcing services they provide. Visit theOutsourcing-guide.com for more information.

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Learning how to tame your wicked problems

By Martin Conboy

Wicked problems are problems that cannot be solved. But they may be tamed. Obesity, climate change, the war on terror can be classified as wicked problems. To tame these problems the usual problem solving techniques based on rational linear analysis do not work. Customer service, particularly in the age of digital disruption, may be viewed as a wicked problem.

“It is hard to say what the problem is, to define it clearly or to tell where it stops and starts. There is no “right” way to view the problem, no definitive formulation. There are many stakeholders, all with their own frames, which they tend to see as exclusively correct. Ask what the problem is and you will get a different answer from each. Someone can always say that the problem is just a symptom of another problem and that someone will not be wrong. The problem is inter-connected to a lot of other problems; pulling them apart is almost impossible. In a word: it’s a mess.” – Jay Rosen of NYU

The term “wicked problem” was coined in 1973 by UC Berkeley scholars, Rittel and Webber. Essentially a wicked problem is difficult or impossible to solve because of incomplete, conflicting and changing requirements. C. West Churchman, systems scientist, describes wicked problems as “a class of social system problems, which are ill-formulated, where the information is confusing; where there are many clients and decision makers with conflicting values; and where the ramifications in the whole system are thoroughly confusing”.

The ongoing challenge of satisfying and exceeding customer expectations, which vary from customer to customer and are constantly changing, meets the criteria of a wicked problem. In this age of digital disruption, where social media and mobility are redefining the relationship between brands and consumers, organisations need to be more creative and innovative in their approach.

We are seeing a whole new suite of service offerings around the ‘customer experience’ and there are plenty of people claiming to have discovered the holy grail of what defines the customer experience. The challenge is that each and every customer is unique and we can no longer lump customers into the easy to manage, and understand segments of a few years ago.

Within an enterprise there are numerous stakeholders with different objectives, including employees, partners, management and shareholders. They each have different perspectives and aims, which may vary, dramatically from the goals of the company.

There’s the basic conflict of trying to deliver improved service, so as to improve loyalty, value and revenue from customer relationships, versus the costs associated with restructuring the business to offer better service. And the needs and requirements of customers, as individuals and as a group, can be largely hidden from managers and executives within an enterprise.

To solve their customer service issues, which also impact their sales and marketing objectives, organisations try to design and build systems and implement strategies. However, many traditional problem solving and project design approaches do not work. And despite their verbal commitment to innovation and improving the experiences of customers, many organisations remain fairly inert and their initiatives are simply tick-the-box exercises.

According to John Kolko, in his article Wicked Problems: Problems Worth Solving[i], most organisations are focused on one type of problem – differentiation. Innovation entails some form of differentiation or newness. But in product design and product development, tiered releases and differentiation often replace true innovation. Every year there’s a new iPod or iPhone. Every year there’s a new version on a car model. Each new release incorporates only slight or cosmetic changes.

But improvement alone may not be enough. Look at what airbnb or Uber are doing to the hospitality and taxi sectors without actually owning anything. There are macro forces at play that are hard to understand i.e. The Cloud that is disrupting established and proven economic business models.

For most companies it’s all about staying ahead of the competition and ensuring quarterly results. This may very well prove to be very short sighted.

Just recently Apple shipped its 1 billionth mobile device, amazing success by any economic standard, but did anybody stop and think about what this really means? We are now so connected with technology that people are constantly burying themselves in their phones that we seem to have lost the art of real communication. So we had disruptive innovation on a grand scale but lost the ability to talk to each other – a very wicked problem. Depending upon your point of view that might be a good or bad thing!

Characteristics of a wicked problem

Horst Rittel highlights ten characteristics of a wicked problem[ii]:

  1. Wicked problems have no definitive formulation. The customer service issues facing one industry or organisation can be fundamentally different to another.
  2. Every wicked problem is unique.
  3. It’s hard, maybe impossible, to measure or claim success with wicked problems because they bleed into one another, unlike the boundaries of traditional design problems that can be articulated or defined.
  4. Solutions to wicked problems can be only good or bad, not true or false.
  5. There is no template to follow when tackling a wicked problem, although history may provide a guide.
  6. There are multiple explanations for a wicked problem.
  7. Every wicked problem is a symptom of another problem.
  8. No mitigation strategy for a wicked problem has a definitive scientific test because humans invented wicked problems and science exists to understand natural phenomena.
  9. Offering a “solution” to a wicked problem frequently is a “one shot” design effort because a significant intervention changes the design space enough to minimise the ability for trial and error.
  10. Designers attempting to address a wicked problem must be fully responsible for their actions.

How does one tame a wicked problem?

The term wicked problem emerged to address problems in social planning and designing public policy. Design problems are typically wicked because they are often ill defined (no prescribed way forward), involve stakeholders with different perspectives, and have no “right” or “optimal” solution.[iii] Thus wicked problems cannot be solved by the application of standard methods; they demand creative and unique solutions.

To tame a wicked problem requires collaboration and creativity. Processes need to be developed to ensure all stakeholders are involved in finding ways to manage the problem[iv]. This will make the planning process more complex, but it also expands the potential for creativity as well as achieving buy-in from all involved.

The ultimate aim should be to create a shared understanding of the problem and encourage a joint commitment to possible ways of resolving it. Not everyone will agree on what the problem is, but stakeholders should be able to understand one another’s positions well enough to discuss different interpretations of the problem and work together to tackle it.

[i] http://www.ssireview.org/articles/entry/wicked_problems_problems_worth_solving

[ii] http://www.ssireview.org/articles/entry/wicked_problems_problems_worth_solving

[iii] http://en.wikipedia.org/wiki/Wicked_problem

[iv] https://hbr.org/2008/05/strategy-as-a-wicked-problem

Originally Published in the Sauce eNewsletter – theOutsourcing-Guide.com

theOutsourcing-guide.com is the ultimate reference guide for the BPO and outsourcing industries and it will become the most comprehensive resource for organisations looking to engage BPO and outsourcing providers. As well as providing a range of eBooks, articles and whitepapers explaining the various aspects of BPO, theOutsourcing-guide.com provides an online directory of providers segmented by category and location.

theOutsourcing-guide.com is a vehicle for vendors and service providers to showcase their organisations and the outsourcing services they provide. Visit theOutsourcing-guide.com for more information.

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5 Tips for Successful Nearshoring

By Shane Jackson

New-ZealandNearshoring is becoming increasingly common as Australian companies deal with a highly competitive labour market and the increasing costs associated with service delivery from contact centres in major cities.  More and more companies are turning to New Zealand as a low risk location, thanks to its ease of business, quality service delivery, lower costs and shared culture with Australia.

Australian companies across diverse industry sectors including Banking and Finance, Insurance, Retail and Health have already found real value from locating their contact centres in New Zealand. But companies should not restrict their search for locations and partners to the major cities. There are significant customer experience benefits to be had by locating centres in regional cities, such as Palmerston North in the Manawatu district.  The high levels of agent retention, low operating costs (35-40% lower than Australia) and the ability to attract specialist staff thanks to the appealing and affordable lifestyle are all substantial advantages.

Locating to any new environment introduces new challenges whether you are transitioning to an in-house centre or engaging the support of an outsource partner. Here are a few tips to ensure the successful implementation of your nearshore strategy.

  1. Define your scope clearly: The decision to move your centre to another country should be more that a knee jerk reaction to cost cutting pressures. Define your end goal and what it will take to get there. A nearshore move is likely to be suited to higher end service, sales and technical programs than more transactional services. Determine which of these services are in scope and prioritise accordingly. Make sure your focus is centred on improving the Customer Experience
  1. Research the strengths of each region and potential partners: Even if the executive strategy is to secure an outsource partner, do your own early research into which regions can demonstrate experience providing the skillsets you require such as IT Support, Customer Service, Sales and multi-lingual skills. Also consider regions with major universities and skilled industry groups as these often provide a pool of available and talented resources. Major outsourcing organisations can generally provide additional insights but don’t overlook the value of freelance specialists in providing invaluable perspectives on locations and implementing omni-channel contact centre strategies in the nearshore environment.
  1. Start small and set realistic ramp timelines: Resist the temptation to go with a big bang approach to transition as this will place enormous pressure on support resources such as recruitment, training and infrastructure groups. Try to get it right the first time through proper planning and a staged ramp. Start with a pilot program if possible. Palmerston North offers existing facilities and infrastructure to conduct your pilot program. Take the learnings from the pilot and remove some of the pain from your first major ramp.
  1. Create sustainable partnerships: Whether you are outsourcing the end-to-end solution or just key components of the solution such as recruitment, training and IT support, make sure that your expectations, including how you will manage variances to the project plan, are clearly articulated in a statement of work. A long term partnering approach will contribute to better collaboration between you and your providers and more sustainable business outcomes in a new operating environment. Regional providers thrive in this environment.
  1. Invest for Success: Securing Executive support beyond the decision making process is critical to removing potential roadblocks from project success. Organisations that successfully transition to overseas environments also seed the new operation with experienced personnel both short and longer term. This facilitates quicker knowledge transfer, cultural alignment and improved speed to competency for agents. Creating virtual, knowledge sharing teams across multiple locations can also prove invaluable.

Article contributed by Shayne Jackson Consulting. Shayne Jackson has been actively involved in the BPO/Contact Centre Industry for almost 20 years. As a results oriented professional with significant experience in thought leadership, he now provides consulting services with a focus on leading strategic and operational initiatives to improve business performance while enhancing the customer experience.

For further information on nearshoring your contact centre in New Zealand please contact Shayne Jackson (mailto:Shayne@sjconsult.com.au?subject=Nearshoring)

theOutsourcing-guide.com is the ultimate reference guide for the BPO and outsourcing industries and it will become the most comprehensive resource for organisations looking to engage BPO and outsourcing providers. As well as providing a range of eBooks, articles and whitepapers explaining the various aspects of BPO, theOutsourcing-guide.com provides an online directory of providers segmented by category and location.

theOutsourcing-guide.com is a vehicle for vendors and service providers to showcase their organisations and the outsourcing services they provide. Visit theOutsourcing-guide.com for more information.

Originally Published in the Sauce eNewsletter – theOutsourcing-Guide.com

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Using Gamification to solve business problems

By Martin Conboy

Children have always been taught games to help them learn, adopt appropriate behaviours and adapt to life’s challenges. Brian Burke, research VP for Gartner, highlights how gamification uses game mechanics and game design techniques in a non-gaming context to solve a range of business problems and challenges[i]. It’s a tool to engage employees, customers and the public.

Gamification has proven to be successful in engaging people and motivating them to change behaviours, develop skills and solve problems. Gamification is currently being applied to customer engagement, employee performance, training and education, innovation management, personal development, and a range of other areas. It has the potential to redefine the nature of BPO and outsourcing relationships, and the value they deliver to clients and providers.

However it is not without its challenges, toward the end of 2013, Gartner released a report predicting that 80 percent of gamified apps will fail to meet their objectives by 2014. The report cites poor design, including meaningless points and badges, as the top reason for the failure of these applications.

This isn’t exactly surprising. Gamification is approaching the peak of its hype cycle, and, as a result, it’s being tacked on to applications even when it doesn’t make sense for a particular business. Many apps are adding badges and other game mechanics simply because they could appeal to potential investors (or because current investors insisted they be added).

What is gamification?

The oldest examples of gamification are frequent flyer programs that airline companies offer as a part of their customer loyalty programs. Gamification was a term that was first coined in 2003 by Nick Pelling, but did not gain popularity until 2010[ii].

Gamification harnesses the basic desires and needs of users (such as competition, status, altruism, and collaboration) to help them reach their goals and objectives. Typical elements of game playing (i.e. Point scoring, competition, badges, rules of play and winning) are applied to other areas of activity, such as marketing, customer engagement, employee training and education, innovation management and so on.

Innovation Management

Gamification is playing a key role in innovation management. Combined with crowdsourcing it allows organisations to engage a target audience and leverage the collective intelligence of the crowd to generate and develop ideas. According to Gartner[iii] the increasing sophistication of innovation game design along with broader target audience participation and more organisations engaged with this approach, will result in an explosion of gamified, crowd sourced innovations by 2020.

Employee Performance

Organisations have been using game mechanics to improve employee performance for some time now. Most contact centres run competitions based around performance and / or number of sales. Unfortunately most of the games designed are crude and rather limited, producing varied results at best.

Most current applications of game mechanics, as you will find in your average BPO contact centre, rely on monetary or other extrinsic rewards and competitive game constructs, where success is limited. These games reward a few top performers, while the rest of the team’s performance lags and continues to fall behind.

Gamification uses the currencies of social capital, self-esteem and fun, as opposed to extrinsic rewards, as motivations for improved performance. It’s based on collaborative rather than competitive games that maximise business outcomes, rather than rewarding a few top performers.

Customer Engagement PlatformsGamification has the potential to revolutionise loyalty and marketing applications. Consumer brands such as Samsung, Nike and Pepsi are leading the way. And though big brands have the resources to develop customised gamification applications, there is a tremendous opportunity for coalition loyalty platforms to develop that aggregate loyalty programs from many retailers, services and brands.

Consumers are tired of participating in dozens of brand-based loyalty programs where the rewards are small and the investment in time is significant. According to Gartner[iv], by 2020, a small number of dominant coalition loyalty platforms could emerge, driven by a number of factors:

  • Cross-brand sponsorship and participation — Loyalty platforms are attractive to consumers if many of the retailers, services and brands that they already use are part of the program.
  • Aggregation of points and levels — By aggregating points, rewards can be more significant, and players can level-up by virtue of their total program involvement, rather than involvement with a single loyalty marketing program.
  • Levels are broadly recognised — Becoming silver or gold member provides recognition and entitlement across the brand network.
  • Players become loyal to the platform and the brand community — Brands that are not part of the community become “outsiders” and less attractive to consumers.
  • Points become a transferable virtual currency — Points can be broadly exchanged for goods, services or other rewards, and can be transferred to other people.
  • Platform consolidation will occur through network effect — Multiple customer engagement platforms will consolidate to create a small number of dominant platforms.

Combining gamification with big data

The benefits of gamification can be greatly magnified when combined with big data analytics. Big data allows business to capture and analyse customer behaviour[v]. The insight gleaned from this analysis can be used to design games and activities that generate more engaging experiences for customers, measure the performance of those games and activities and identify areas for improvement.

All in all it’s about increasing loyalty by creating an enjoyable experience that connects with the user above and beyond the extrinsic rewards such as money.

[i] http://www.gartner.com/technology/research/gamification/
[ii] http://badgeville.com/wiki/Gamification.
[iii] http://www.gartner.com/doc/2226015?refval=&pcp=mpe.
[iv] http://www.gartner.com/doc/2226015?refval=&pcp=mpe.
[v][v] http://badgeville.com/wiki/Gamification#how gamification and big data are driving.

theOutsourcing-guide.com is the ultimate reference guide for the BPO and outsourcing industries and it will become the most comprehensive resource for organisations looking to engage BPO and outsourcing providers. As well as providing a range of eBooks, articles and whitepapers explaining the various aspects of BPO, theOutsourcing-guide.com provides an online directory of providers segmented by category and location.

theOutsourcing-guide.com is a vehicle for vendors and service providers to showcase their organisations and the outsourcing services they provide. Visit theOutsourcing-guide.com for more information.

Originally Published in the Sauce eNewsletter – theOutsourcing-Guide.com

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The Five Basic Steps of Process Optimisation

By Mark Atterby

processImproved efficiency leading to reduced costs is the main reason for optimising business processes. Most companies’ efforts to optimise are relatively short-lived and not part of an ongoing process in itself. There’s the belief that such efforts reach a point of diminishing returns. That maybe true if we lived in a static world where things never change.

Change due to evolving technology, new business and sourcing models and competitive threats, is the only constant in this complex world. Enterprises looking to stay ahead of the game need to be agile and flexible, with highly optimised processes to respond to dynamic and complex market conditions.

Wikipedia defines process optimisation as:

Process optimisation is the discipline of adjusting a process so as to optimize some specified set of parameters without violating some constraint. The most common goals are minimizing cost, maximizing throughput, and/or efficiency. This is one of the major quantitative tools in industrial decision making. 

According to IBM the optimisation of business processes is about implementing a system approach to innovation and managing change[i]. It’s about comprehensive change and re-engineering the business to realise gains through exploiting emerging technology. It’s a constant drive for innovation and improved business outcomes.

Process optimisation is becoming a vital component of most outsourcing and shared services projects. In fact, a recent survey by the SSON (Shared Services and Outsourcing Network) has identified it as the most important trend within the sector[ii].

Step One: Establish a process for optimisation itself

There are plenty of methodologies and associated terms used to identify waste and optimise business processes, such ISO, Lean Manufacturing, Six Sigma, BPM, TQM, Kanban, Kaizen,and so on.

Regardless of what you put in place it’s about establishing a process for optimisation. It’s important not to treat this as a one-off project otherwise the benefits attained will likely be limited and short-lived.

A process to improve processes should adapt to change and allow you to quickly modify your process as necessary[iii].

Step Two: Identify business outcomes and goals

Understanding and defining desired business outcomes provides clear direction for the optimisation process[iv]. It enables all stakeholders to fully engage and cooperate with agreed upon and clearly understood objectives. Measurable business outcomes become the central focal point rather than requirements.

Step three: Measure the performance of existing processes

Business performance is typically measured by a comparison of track record with existing scorecards, balance sheets, or key performance indicators (KPIs). To understand the benefits delivered by the optimisation process you need to fully understand things as they are and the associated costs and inputs in relation to the current business outcomes being delivered.

Step four: Map and redesign the processes

Identify and map out all the steps, tasks and activities associated with the process or processes you are looking to optimise. You need to assess the processes from an end-to-end perspective and how it crosses different job roles and departments within the organisation. How will the proposed changes impact current job roles and departmental functions? What conflicts or misalignments exist between different processes and their associated activities and goals (these have the greatest impact on the overall efficiency of the organisation)?

Step five: Automate with technology

Finally assess how much of the redeveloped processes can be enabled and automated through technology.

[i] http://www.ibm.com/developerworks/websphere/library/techarticles/1204_arsanjani/1204_arsanjani.html

[ii] http://www.sharedservicesweek.com.au/redForms.aspx?eventid=8186&id=389080&FormID=11&frmType=1&m=40648&

[iii] http://www.ingenuus.com/collateral/positionpapers/PP-ProcessOptimization.pdf

[iv] http://www.ibm.com/developerworks/websphere/library/techarticles/1204_arsanjani/1204_arsanjani.html

theOutsourcing-guide.com is the ultimate reference guide for the BPO and outsourcing industries and it will become the most comprehensive resource for organisations looking to engage BPO and outsourcing providers. As well as providing a range of eBooks, articles and whitepapers explaining the various aspects of BPO, theOutsourcing-guide.com provides an online directory of providers segmented by category and location.

theOutsourcing-guide.com is a vehicle for vendors and service providers to showcase their organisations and the outsourcing services they provide. Visit theOutsourcing-guide.com for more information.

Originally Published in the Sauce eNewsletter – theOutsourcing-Guide.com

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Why Recruitment Agencies Need to Outsource Their Back Office

By Martin Conboy

Every time I speak to a recruitment company, they always seem to want to turn back the clock to a time when the market was nicely structured and ordered and clients and candidates behaved themselves. They fail to appreciate how things have changed.

Romantically, they cling to a time circa 1985, when clients paid for expensive display adverts in the Saturday papers that promoted the recruitment company’s brand and candidates dutifully applied for the advertised positions. Recruitment projects took six weeks; the earning potential was excellent and lots of recruiters were flashing around in very expensive motorcars. It really was the best gig in town!

Fast forward to today and the recruitment market in Australia has changed, according to the Manpower Australian Employment Outlook Q1 2015 – ‘Australian employers report encouraging signs for job seekers in the upcoming quarter. With 19% of employers expecting to increase staffing levels, 12% are forecasting a decrease and 68% anticipating no change. This remains relatively stable year over year.’ It is worth noting that the market has been in decline since 2010.

https://www.manpowergroup.com.au/documents/MEOS/2015/MEO

What changed? Today, recruiters are finding it difficult to articulate their value proposition to their clients. In many ways, a recruiter seems to be nothing more than an expensive resume screener to their clients and these employers are sceptical about the position of recruiters in the market. They are unable to see or understand the cost benefits of using an external recruiter.

When one considers that even though recruitment companies have large databases of candidates, because they are badly structured, they cannot access them to exploit the gold that lies within. In this day and age with all of the tools and specialist recruitment software available, it’s beggar’s belief to learn that companies are still trying to manage their candidates by using Microsoft Outlook and Excel (very last century).

Recruitment company databases, although having large numbers of candidates, are almost useless as they are not ‘clean’ and badly formatted. Moreover, no one inside the recruitment firms spends enough time working with the databases to really extract value from them – it’s just too hard!

As a result of recruiters struggling to deliver the touted value of their databases, they turn to throwing up adverts on an online job board with a wing and a prayer hoping that a candidate will put their hand up. Consequently, the notion of delivery of “Expertise – as – a – Service’ (EaaS) falls flat.

The recruitment market is saturated; is hyper competitive and costs are not going down. Retained assignments are rare and employers will only pay on a ‘first past the post’ basis. Whoever fills the position gets the prize. Many recruiters are working in a hidden factory underneath their business that no one is paying for and over ninety per cent of their assignments will not generate a fee.

Some leading recruitment industry commentators report that over one third of staffing companies are operating at a loss and another third are barely breaking even. The leading, savvier firms are automating their processes and augmenting their systems by utilising less expensive recruiters based in places like the Philippines to gain a competitive advantage. I have written about video recruitment firms like Canadian based VidCruiter (www.VidCruiter.com.au) who are leading the charge in the North American markets.

The market is driven by metrics like “speed to hire” and candidates are now sourced on social media sites like LinkedIn. Job boards and traditional job boards are passé and are no longer as effective as they once were.

A surge of new technologies and media innovations have really altered the landscape. The point is that those who know how to engage with the new ‘internet of everything’ world will thrive and those that don’t or cannot be bothered will be left behind.

Lastly, apart from all of the economic process considerations mentioned above that will impact on recruitment companies, the biggest shop stopper is poor candidate management. It’s like a slow burn or the death of a thousand cuts for a recruitment company’s reputation.

Everybody knows about it; candidates apply for a job, take time and consideration over their application; throw their hats in the ring – and then nothing! Guess who they tell about their bad experience – everybody, absolutely everybody and now their voice is amplified by access to social media. In fact, people work overtime to trash recruitment companies’ reputation.

The reader might like to read http://gregsavage.com.au/2011/03/02/“god-i-hate-recruiters”/, which provides an excellent insight to the issue. Better still put ‘I hate recruiters’ into a search engine browser and take your pick. I got 488,000 pages. Ouch!

Why not employ a less expensive assistant in the Philippines to do rejection emails and you may even win praise for being a leader in candidate care.
It is, therefore, little surprise that the outsourcing model is evolving quickly. Forward looking companies are adopting an outsourcing model into their core business process to generate high ROI, reduce cost, and fill job orders faster.

Recruitment Industry commentator Rod Hore recently published the following in his blog:

“Here are 5 big reasons why recruiting businesses are outsourcing their work to an offshore partner:

Reduce Cost: By outsourcing ancillary functions to an offshore recruitment partner, you can save a big-time cost. It has also been seen that staffing firms save up to 60% costs by outsourcing their work to an offshore partner. Additionally, recruitment firms even reduce their infrastructure expenses such as extra cost for hiring personnel, as once they tie up with an offshore partner, they need not establish an additional workplace in any new location.

Global Advantage: Success of recruitment businesses depends on how fast they can deliver qualified, available and retainable candidates from across the globe. Your client will always think of growing globally and would want to hire resources that can support their business plan in diversified geographies. Even recruitment agencies need to spread their network and speed up hiring faster from different geographies without adding cost to the business. This is possible only by outsourcing their sourcing process to an offshore partner that has expertise in hiring candidates at a global level.

Speed & Flexibility: Many offshore recruitment service providers work as per the time zone requirements of their client’s geography. Staffing firms can get the benefit of running their business in full control even in uncertain business environments, if they outsource their independent tasks to an offshore firm that offers flexible environment and works to meet on-demand needs.

Productivity: Recruiter’s efficiency is severely affected by overburdened non-core functions. By outsourcing ancillary functions to an outsource partner, staffing firms can optimally utilize the efficiency of their precious human resource in generating real time returns. With a strong support of offshore recruitment model the team can produce faster results and increase turnaround time to the costumer. It increases the in-house productivity and also overall business productivity.

Save Time: Efficient utilization of time is the biggest reason for which businesses are switching to ORS model. Staffing firms from different geographies enjoy the benefits of difference in time zones as they can run their business 24×7 in spite of limited team size by outsourcing their services. They can speed up their processes and reduce service delivery time remarkably.”

Recruitment Virtual Support Agents (RVSA) are here now and their use is growing quickly. Businesses like www.VirtualAssistantMums.com that support Australian recruitment companies with everything from screening, assessment and candidate profiling to resume harvesting from social media sites like LinkedIn and database maintenance.

Leading recruitment industry advisor and high performance recruitment coach Ross Clennett, said,
“Agencies lose productivity to sub-par support staff; however, offshoring these services is a time- and cost-efficient solution,” said Clennett.

“Business support specialist Rusher Rogers Recruiting turned to an offshore admin and support solution after escalating staff costs and turnover issues negatively affected the company’s profitability,” Clennett said.

“The company has had mixed success with admin and support consultants, typically being okay [at] admin but generally weren’t very good at sourcing candidates and only skilled at processing incoming applicants,” he said.

“The agency began using a ‘Recruitment Virtual Support Agent’ (RVSA) to address the issue,” said Clennett.

“For a monthly cost of $3,000 plus GST, the admin and support role is undertaken by an RVSA saving [the company] around $2,000 a month in salary ‘on costs’, before the savings of associated office costs.”

The old model of recruitment is broken. To survive, the modern recruitment firm has to lower its operating costs and outsourcing its back office processes is the most obvious and logical thing to do.

“After living with their dysfunctional behavior for so many years (a sunk cost if ever there was one), people become invested in defending their dysfunctions rather than changing them.”

Marshall Goldsmith
Mojo

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Originally Published in the Sauce eNewsletter – theOutsourcing-Guide.com

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