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How to manage people at work successfully has been a major question since industraliasation. Today more the ever greater emphasis is being placed on maintaining a smaller number but highly motivated and highly productive workforce. As such HRM has come to occupy a more prominent role in employment relationship.
Now a day's Organizations are operating within an increasingly dynamic external environment. To succeed in this environment many organizations have recognized the need to achieve greater levels of flexibility and efficiency. The use of appropriate HR strategies is critical to the success of any organization in meeting the challenges it will face in today's environment.
The research is on one of the topic of HRM. It is on one of the critical areas of HRM i.e. outsourcing recruitment. The research encompasses comparison between orthodox style of recruiting and newer trend of outsourcing its function. The aim is to figure out the changes in the recruitment style over the years.
Within the research, HRM itself is defined. Its evolution and the present status, the HR challenges in recruitment over the years are also being discussed. The research defines recruitment and the circumstances leading to it. Furthermore, various sources of recruitment are also mentioned in the thesis. Among the sources, outsourcing and its benefits, with respect to recruitment policy and qualities of recruiter are also discussed.
Organizations are establishing their strategic direction and developing a corresponding employment plan, they must turn their attention to get the right employees/workforce. The jobs that have been identified and their associated skills point to very specific types of employees that are required. To be specific in employment choice the company must embark on an employment process of finding and hiring qualified people. The core of the issue is to pick right people for the right job.
Prior to mid 1960's, personnel departments in organizations were often provided as the "health & happiness" crews. Their primary job activities involved planning company picnics, scheduling vacations, enrolling workers for health care coverage, and planning recruitment parties. On the other hand recruitment process use to be very time consuming, it started when the organization used to notify in public that an opening exists through very attractive advertisements to get potentially qualified applicants' response. Then, after several interactions with the most promising of these candidates, employees were hired. That has certainly changed over the decade.
Today, jobs have changed. They have become more technical and require employees with greater skills. In fact technology related jobs in US grew by 320 percent in the late 1990s, and that growth is predicted to continue through the early years of the new millennium. And, of course, the global competition has increased the importance of organizations in improving the productivity of their workforce; this has resulted in the need for HRM specialists trained in psychology, sociology, organization and work design, and a working knowledge of the law.
1.2. PRESENT STATUS:
Technology is changing the business of HR. The HR dept that is critical to any organization is opting for outsourcing since it offers significant cost and time advantages. Attracting, retaining and developing workforce, and keeping abreast of the latest technology can prove difficult and costly for many organizations. Almost all businesses can benefit from some kind of outsourcing. But the challenge is to decide which HR process to outsource and which to retain. During the last few years, HRO has become one of the much talked about areas in HR. It is one of the fastest growing subsets of there more comprehensive BPO. Even America and European organizations, over the past two to three decades, have embraced the general concept of outsourcing and have incorporated it into their way of functioning.HR functions include payroll administration, employee benefits, recruitment, training and development, and compensation management. Small business often does not have the required staff or the budget to properly handle the nitty gritty details of HR. Because of this, more and more small businesses are beginning to outsource their HR recruitment. In fact the HR outsourcing industry is expected to grow significantly, according to the market research.
1.3. RECRUITMENT POLICY OF A COMPANY:
In today's rapidly changing business environment, a well defined recruitment policy is necessary for organizations to respond to its human resource requirements in time. Therefore, it is important to have a clear and concise recruitment policy in place, which can be executed effectively to recruit the best talent pool for the selection of the right candidate at the right place quickly. Creating a suitable recruitment policy is the first step in the efficient hiring process. A clear and concise recruitment policy helps ensure a sound recruitment process.
It specifies the objectives of recruitment and provides a framework for implementation of recruitment programme. It may involve organizational system to be developed for implementing recruitment programmes and procedures by filling up vacancies with best qualified people.
1.4. SOURCES OF RECRUITMENT:
Every organization has the option of choosing the candidates for its recruitment processes from two kinds of sources:
The sources within the organization itself (like transfer of employees from one department to other, promotions) to fill a position are known as the internal sources of recruitment.
Recruitment candidates from all the other sources (like outsourcing agencies etc.) are known as the external sources of recruitment.
1.5. HR CHELLENGES IN RECRUITMENT:
The major challenges faced by the HR in recruitment are:
Adaptability to globalization - The HR professionals are expected and required to keep in tune with the changing times, i.e. the changes taking place across the globe. HR should maintain the timeliness of the process
Lack of motivation - Recruitment is considered to be a thankless job. Even if the organization is achieving results, HR department or professionals are not thanked for recruiting the right employees and performers.
Process analysis - The immediacy and speed of the recruitment process are the main concerns of the HR in recruitment. The process should be flexible, adaptive and responsive to the immediate requirements. The recruitment process should also be cost effective.
Strategic prioritization - The emerging new systems are both an opportunity as well as a challenge for the HR professionals. Therefore, reviewing staffing needs and prioritizing the tasks to meet the changes in the market has become a challenge for the recruitment professionals.
1.6. OUTSOURCING PROCESS:
1.7. HOW TO SELECT A RECRUITMENT CONSULTANT:
If an organization decides to outsource its recruitment processes or activities, it is very important to find and select a suitable recruitment consultant or consultancies, which can deliver results according to the needs of the organization. Today, there are thousands of consulting firms (consultancies) as well as freelance consultants working independently. An organization looks for various considerations and qualities before selecting the suitable recruitment consultant.
The reputation of the consulting firm in the job market (based on expertise and experience).
Who are the consultant's or firm's past and present clients?
Qualities of an independent recruitment consultant:
Some of the qualities or characteristics looked in recruitment consultants are:
Flexibility and adaptability
Ability to prioritize
Ability to judge the candidate according to the job specification.
Selecting the right recruitment consultant is essential for the effective recruitment processes. A successful Recruitment consultant is someone who has an analytical mind, focused, works harder and smarter than competitors and continually set and achieve higher standards.
Outsourcing is an arrangement in which one company provides services for another company that could also be or usually have been provided in-house. Outsourcing is a trend that is becoming more common in information technology and other industries for services that have usually been regarded as intrinsic to managing a business. In some cases, the entire information management of a company is outsourced, including planning and business analysis as well as the installation, management, and servicing of the network and workstations. Outsourcing can range from the large contract in which a company like IBM manages IT services for a company like Xerox to the practice of hiring contractors and temporary office workers on an individual basis.
1.7.1. Define Outsourcing - Definition with Meaning
To define outsourcing in the right way, one has to take into consideration a variety of factors. Outsourcing is the process of shifting/delegating/transferring a service/process/function to a third-parties/external service provider which would otherwise be an in-house function/service/process.
1.7.2. WHY OUTSOURCE:
We have already seen that cost savings is one major reason why companies outsource. There are also other factors like greater flexibility and access to a larger number of skilled people without actually employing them.
As stated earlier, manufacturing, labor and material costs are much higher in the United States than in countries like India where skilled labor is easily available. Domestic outsourcing can also reduce costs. People hired on a contract/outsourcing basis do not have to be paid for Medicare, pension and other benefits and thus they prove to be easier on the company's budget regardless of ethics.
Apart from this outsourcing also offers greater flexibility to companies. Companies develop a larger network of qualified individuals and specialist companies through outsourcing. This comes in handy when the company needs a larger than usual or more complicated project at hand.
1.7.3. ADVANTAGES OF OUTCOURCING RECRUITMENT:
Traditionally, recruitment is seen as the cost incurring process in an organization. HR outsourcing helps the HR professionals of the organisations to concentrate on the strategic functions and processes of human resource management rather than wasting their efforts, time and money on the routine work.
Outsourcing the recruitment process helps to cut the recruitment costs to 20 % and also provide economies of scale to the large sized organizations.
The major advantages of outsourcing are:
Outsourcing is beneficial for both the corporate organizations that use the outsourcing services as well as the consultancies that provide the service to the corporate. Apart from increasing their revenues, outsourcing provides business opportunities to the service providers, enhancing the skill set of the service providers and exposure to the different corporate experiences thereby increasing their expertise.
1.8. STATEMENT OF THE PROBLEM:
The following questions are the statements, based on which their research is going to be made.
Why is there a growing need to outsource? Are HR department's not able to fully concentrate on the task of recruitment due to money constraints, or are there some other factors?
Why organizations (like JS Bank, Johnson & Johnson) are influenced towards outsourcing their strategic function of recruitment (either in absence/presence of their HR department?).
1.9. SIGNIFICANCE OF THE STUDY:
This will help me to attain practical knowledge and understanding related to recruitment outsourcing practices that is considered to take strategic decision for many organizations in the 21st century.
This study can be beneficial to all the information seekers and many more. The significance or the study is as follows:
TO ME: First of all HR is a field that I 'am thinking to explore on as my future, the research would facilitate me in interacting with organization heads.
Secondly, it would help me to understand the HR practices & procedures.
Thirdly, it will serve as an additional source of knowledge to me.
TO STUDENTS: They will know beforehand, what is the process of recruitment, even before they enter the applicant pool for the jobs. The concept of outsourcing will be familiar to them and could be handy later at their jobs.
TO ORGANIZATIONS: Organizations will be aware of the current practices of organizations in the field of HR; will know about the trend followed in the market.
Secondly, the study conducted can be reliable source to the research based organizations or company under the study related to this segment.
TO AGENCIES: They will know in which industry, there is requirement and where they are still not applicable. And accordingly, they can plan their future practices.
1.10. SCOPE OF THE STUDY:
This research is restricted to 3 companies operating in Karachi. Among these organizations, the HR function recruitment will be concentrated along with outsourcing as reference recruitment.
1.11. BASIC ASSUMPTION:
The sample size of the survey is 3 companies. Any increase in the sample size, for example, increase from five to ten will lead to a different result.
Secondly, an increase in the number of outsourcing agencies may cause some firms to outsource various strategic function hence may have an impact on the thesis.
Third, recession of the economy due to which organizations start laying-off.
"CHAPTER NO 2"
2.1. RESEARCH DESIGN:
The research design would be descriptive and exploratory. The study comprises of a survey research, which is carried out with the help of both secondary and primary data sources, which includes interviews (both structured and unstructured), internet, questionnaire, books & previous reports. The data is collected through questionnaire & interviews & is then further analyzed with the help of a descriptive analysis.
The Descriptive analysis consist of the tabulation of question & the cross consumption of the response in order to establish the recruitment outsourcing of the employee in relation to these organization that have their own HR department which is the main objective of this research.
2.1.1. STUDY SETTINGS:
The Study Settings is non-contrived i.e. the research is conducted in natural environment and would be no interference from researchers side. Its field study as it examines the recruitment outsourcing trend in natural environment.
2.1.2. TIME HORIZON:
The Study is cross sectional in nature. Cross sectional in the sense that what you see when you cut the middle of something so that you can see the different layers.
2.2. RESPONDENTS OF THE STUDY:
Johnson & Johnson's
Standard Chartered Bank
2.3. RESEARCH INSTRUMENTS:
The data being collected for this particular research will consist of primary and secondary sources. Primary sources of the data are:
A Questionnaire is designed to get the practical information about the research. The questionnaire is key source of gathering critical information. The first part of the questionnaire consists of the information about the specialized HR department and recruitment. The other part is about the significance of outsourcing associated with the time and cost saving. It comprises of all the related information needed to evaluate and reveal the outsourcing trends in organizations.
Various Structured and unstructured interviews will also be conducted that will serve as a primary source in collecting data.
The Secondary Source includes:
The Internet and the Articles,
Theory books of Human Resource and Reports.
2.4. TREATMENT OF THE DATA:
The Data is collected via different methods is qualitative and quantitative in nature that will be analyzed and further converted in assumptions on which the project is based upon. Various appropriate and related mathematical methods will be used for the analysis of these assumptions so that the data collected is made useful.
"CHAPTER NO : 3"
REVIEW OF LITERATURE&STUDIES
3.1. RPO, the future of recruitment.
| March 02, 2009 | COPYRIGHT 2009 Kasturi & Sons Ltd. This material is published under license from the publisher through the Gale Group, Farmington Hills, Michigan.Â Â All inquiries regarding rights should be directed to the Gale Group. (Hide copyright information)
From BUSINESS LINE, March 02, 2009 The Bangalore-based IT consulting firm MindTree Consulting made a clean sweep at the annual Recruitment and Staffing Best in Class (RASBIC) Awards ceremony, winning five of the seven awards at the event held last month. It was recognised as the Best Recruiting and Staffing Organisation of the Year.
The company attributed the achievement to its talent acquisition team that had transformed recruitment from a traditional Excel-based recruiting and staffing function to a cost-effective process with a faster turnaround and better job fits.
Sanjay Shelvankar, Vice-President, MindTree Consulting, puts the company's recruitment effectiveness down to a well-managed recruitment process outsourcing model (RPO). "RPO is the future and the rest of the world has recognised it - the time is ripe for India to replicate this model," he says in an interview with The New Manager.
In his opinion, when the current recessionary period passes and the IT industry gets back to binge-hiring, it will be the ability to recruit large numbers, swiftly, consistently and in an inexpensive manner that will help the sector resume its high growth rate.
Please explain how an RPO vendor is different from other recruitment partners (non-RPO vendor model)? The difference is actually that between the sky and earth. A recruitment partner is usually one of many resume sourcers (contingency hiring organisations) and in some cases may also supply contract recruiters to the client. The recruitment partner usually works in conjunction with the client's existing recruitment teams and other sourcing vendors. Most often, the planning, processing and almost all the strategic areas of recruitment are retained by the client-side recruiter team. In this model, accountability is not passed on fully to the recruitment partner and the commercial model followed will at best be a fixed retainer fee that may or may not have a variable bonus component.
RPO is the complete 'process' outsourcing of recruitment. This means that the RPO vendor holds complete accountability for transforming the client's processes and is ultimately responsible for all areas - tactical and strategic. The commercial model is a full-risk switchover to outcomes/value-based pricing, a clear departure from the traditional no-risk retainer fee model.
How is the effectiveness of the RPO vendor measured? When we defined RPO, we realised that it would be relevant to an organization only if it links its payments to value created and/or outcomes achieved. The challenge was to quantify the value/outcomes in detail so both parties were satisfied that they were getting a fair deal. At MindTree, it was relatively easy to get here as we had begun measuring our recruitment effectiveness internally before we implemented the RPO model. We have identified eight critical-to- quality (CTQ) items that we will monitor in the RPO engagement, namely, the fulfilment index, source mix, no-shows, offer to joining conversion rate, turnaround time, screening to interview selects, cost per hire and effort per hire.
3.2. Outsourcing As a Way of Cutting Down Costs
By Malvin Ryan
The term "outsourcing" has been heavily used over the past few years, but oftentimes the meaning of this process wrongfully understood. If we were to give it a dictionary definition, outsourcing would be the process of an organization or individual transferring the ownership of a business process to a supplier (which in turn can be an organization or individual). Some would argue that this is a simple business relationship, but with outsourcing there's a catch. The difference between a simple business relationship and outsourcing is the way the control over the business process is handled and transferred. In the first case, the buyer retains full control over the entire process and simply tells the supplier what to do, with details nailed down to the point. With outsourcing however, the buyer rarely instructs the supplier on HOW to do the work. Basically, the buyer will simply tell the supplier WHAT he needs and give him a set of general guidelines, but it's left to the supplier's creativity to get the job done.
Of course, outsourcing is a double-edged sword for both buyers and suppliers. From the buyer's perspective, the benefits of outsourcing are the reduced involvement in the project, which allows for more spare time focused in a different direction. You don't have to keep a constant eye on the supplier's work, simply because you're more interested in the final outcome than on how they handle things. On the other hand, the end result might not be satisfactory, which creates a sort of deadlock situation. On one hand, the supplier might argue that that's what you asked for and that you did not provide them with conclusive information.
From the supplier's point of view, outsourcing can be both a pain and a boon. On the bright side, you have almost full control over the project and you can choose your own ways to get it done. However, you risk not hitting the points that the buyer aims for, especially if his communication skills are not very high.
Outsourcing is a bigger business branch, containing several smaller ones such as offshore outsourcing, crowdsourcing and freelancing. Offshore outsourcing is mainly a term used by US-based businesses, describing the outsourcing of projects in Europe or Asia. The projects are sent over to companies in countries that are less developed, offering a cheaper work force at equal quality. The IT market for example is constantly being offshore outsourced in India, Romania or Ukraine as well as several other countries.
Crowdsourcing is a clever business technique that relies on enthusiasts to do the job done. For example, electronic freelancers, photo enthusiasts, amateur writers are all examples of crowdsourcing. Their work is bought of very cheap and oftentimes free and then used in a business. Crowdsourcing is considered slightly unethical by some, since the buyer will profit from someone's work without having to pay for it, however in most cases, the suppliers will be glad to see their work being used, their photos being published and their articles appearing on websites or in magazines.
Besides these methods, there are several other ones related to outsourcing, including homecoming, open outsourcing, supply chain outsourcing, vertical integration and so forth.
I am an accountant working in finance outsourcing company. I generally write about accounting outsourcing and bookkeeping to share my experience and clarify the misconception among people.
Article Source: http://ezinearticles.com/
"CHAPTER NO : 4"
Q1. How many people in your organization hired annually?
15 - 25
25 - 30
Table no 4.1:
The above figure and graphical representing simply representing the response of the people who have been working in the JS Bank, Johnson & Johnson & Standard Chartered Bank as a result of some of their employees told 30% people hired annually, some go for 37% people hired annually, some for 13% people hired and last but not least some for 20% people hired.
Q2. On average, what is the employee turnover rate in your organization?
Table no 4.2:
The above figure and graphical representing simply representing the response of the people who have been working in the JS Bank, Johnson & Johnson & Standard Chartered Bank as a result of turnover rate there is 0% for high, 13% for Average turnover & 87% for the less turnover.
Q3. Do you have a specialized HR department?
Table no 4.3:
The above figure and graphical representing simply representing the response of the people who have been working in the JS Bank, Johnson & Johnson & Standard Chartered Bank as a result of they have HR dept in all of these organizations.
Q4. If yes, how many employees are in the HR department?
More than 15
Table no 4.4:
Employees in HR:
More than 15
The above figure and graphical representing simply representing the response of the people who have been working in the JS Bank, Johnson & Johnson & Standard Chartered Bank as a result of employees in HR Department of these organizations are 20% for 5 employees, 13% for 10 , 30% for 15 employees and 37 % for more than 15 employees in HR Department.
Q5. What is the major department where the recruitment is more frequently conducted?
Table no 4.5:
Department for Recruitment
The above figure and graphical representing simply representing the response of the people who have been working in the JS Bank, Johnson & Johnson & Standard Chartered Bank as a result of departments where more recruitment is conducted in Finance 33%, in Human Resource 23%, in Marketing 27%, in Research 10% & in others 06%.
Q6. What are the sources of recruitment preferred in your organization?
Table no 4.6:
Sources Of Recruitment
The above figure and graphical representing simply representing the response of the people who have been working in the JS Bank, Johnson & Johnson & Standard Chartered Bank as a result of sources of Recruitment are 14% by Advertisement, 40% Internal Search, 23% by Employees Referrals, 23% through Outsourcing & others 00%.
Q7. For what types of positions recruitment is generally carried out?
Top Level Management,
Middle Level Management,
Front Line Management.
Table no 4.7:
Middle Level Management
Front Line Management
The above figure and graphical representing simply representing the response of the people who have been working in the JS Bank, Johnson & Johnson & Standard Chartered Bank as a result of Hiring on these levels are 00% for Top Management, 57% for Middle Level Management & 43 % for Front Line Management.
Q8. Do you currently use external consultants to assist your recruitment?
Table no 4.8:
The above figure and graphical representing simply representing the response of the people who have been working in the JS Bank, Johnson & Johnson & Standard Chartered Bank as a result of they use external consultants 33% says "yes" & other 57 % says "no".
Q9. If you outsourced recruitment or if you intend to them, what are the major reasons/factors?
Agencies have greater database,
Information is kept confidential,
Cost & money save,
Efficiency is increased,
All of the above
Table no 4.9:
Reason for outsource:
Agencies > Database
Information is kept confidential
Cost & Money Save
All of the above
The above figure and graphical representing simply representing the response of the people who have been working in the JS Bank, Johnson & Johnson & Standard Chartered Bank as a result of reason or factors for outsourcing 03% that agencies have greater database, 10 % says information is kept confidential, 50% response for cost & money saving, 20% for efficiency increased & 17% for all of the above reasons.
Q10. Do you see an increasing trend towards outsourcing?
Table no 4.10:
Increasing trend Outsourcing:
The above figure and graphical representing simply representing the response of the people who have been working in the JS Bank, Johnson & Johnson & Standard Chartered Bank as a result of the increasing trend of outsourcing 48% says yes , 10% for no & also 10% for may be .
Q11. What are the advantages of outsourcing in the HR process?
Focused Management Efforts,
Optimal Resource Utilization,
Table no 4.11:
Advantages of Outsourcing:
Focused Management Efforts
Optimal Resource Utilization
The above figure and graphical representing simply representing the response of the people who have been working in the JS Bank, Johnson & Johnson & Standard Chartered Bank as a result of advantages of outsourcing we have 30% go for cost reduction, 00% go for focused management efforts, 13% for optimal resource utilization & 37% go for to find best recruits.
Q12. If you are outsource what features of the agencies your organization focus on?
Flexibility and adaptability
Ability to judge the candidate according to the job specification.
Table no 4.12:
Focus on :
Flexibility & adaptability
Ability to judge
The above figure and graphical representing simply representing the response of the people who have been working in the JS Bank, Johnson & Johnson & Standard Chartered Bank as a result of they go 17% for marketing skills, 30% for flexibility & adaptability, 53% for ability to judge candidate, 0% for wisdom & 0% for others.
"CHAPTER NO : 5"
SUMMARY OF FINDINGS,
5.1. SUMMARY OF FINDINGS:
Organizations outsource recruitment and hiring practices for many reasons. Some may lack the internal resources to address their talent acquisition needs. Others may want to focus on core competencies, or to look for a competitive advantage in competing for talent. Whatever the reasons, Recruitment Process Outsourcing (RPO) is a growing practice. Despite this growth, limited information exists on the trends in RPO use, the specific recruitment practices it includes, and how well it is being carried out by these organizations.
The survey results reveal several trends about the adoption of RPO today, the definition and scope of the practice, and current and future Outsourcing opportunities.
More than half of these companies utilize RPO.
Johnson & Johnson only of these organizations currently outsource some or all of their recruiting process.
50 percent say they will use Outsourcing in the next five years. Another some percentage are unsure.
The majority of current Outsourcing deals cover selective practices for tactical needs.
Among users, the most common definition is the outsourcing of some recruiting activities for some levels of employees. The recruiting service considered most important to organizations' talent acquisition goals, Active Recruiting, is the second most likely service to be outsourced.
An Opportunity for Competitive Advantage
The results of our study indicate a widespread use of Outsourcing to focus on tactical recruiting practices. However, they also demonstrate that those organizations using Outsourcing as a talent acquisition approach to address strategic needs are much more likely to capture the full value of Outsourcing, and improve competitiveness in today's marketplace.
What is becoming clearer as the Outsource market continues to mature is that Outsource can transform talent acquisition and talent management. It is a matter of knowing the path to those results. Both the company evaluating and the provider they choose need to take and apply the lessons that the industry's failures have afforded them. Partnering with the right Outsource vendor in the right manner can both tip the recruiting scales in the employer's favor and deliver pervasive talent gains throughout the organization.
Recruitment professionals should:
Help organizations learn about themselves by overcoming the insider/outsider problem,
Align the recruitment experience with professional consultants,
Find ways to connect with the passive job seeker,
Broker and utilize peer-to-peer relationships,
Use social networks to build personalized relationships online,
Be clear about what you want,
Use a thorough recruitment process,
Always recruit the right person for the job.
A word on the future:
A core principle behind scenario planning is that it is impossible to predict an inherently unpredictable future. That same uncertainty, however, should be empowering. The uncertainty surrounding the future highlights the possibility of many different future scenarios - and signals our own ability as individuals, organisations and whole societies to shape change as we would prefer it. We hope that the research, analysis and recommendations contained in this pamphlet go some way to helping all those with a stake in the recruitment process and help create a future that is brighter, happier and more productive.