“Contemporary Trends in Human Resource Acquisition” INTRODUCTION: TO HUMAN RESOURCE MANAGEMENT
An organization is nothing without human resources. What is IBM without its employees? A lot of factories, expensive equipment, and some impressive bank balances. Similarly, if you remove the shell U.S. Army, the CIA, the Los Angeles Unified City Schools, or the shell Oil Company, what would you have left? Not much.
The above paragraph is meant to dramatize something that most of us take for granted. When you think about the millions of organizations that provide with goods and services, any one or more of which will probably employ you during your lifetime, how often do you explicitly consider that these organizations depend on people to make them operate? It is only under unusual circumstances, such as when the clerks go on strike at your local supermarket or the teachers walk out in your school district, that you recognize the important role that employees play in making organizations work, but how did these people come to be employees in their organizations? How were they found and selected?
Why do they come to work on a regular
basis? How do they know what to do on their jobs? How management knows if the employees are performing adequately? If they are not, what can be done about it? Will today’s employees be prepared for the work the organization will require of them in ten, twenty, or thirty years?
What Is Human Resource Management: Human resource management (HRM) is concerned with the “people” dimension in management. Since every organization is made up of people, acquiring their services, developing their skills, motivating them to high levels of performance, and ensuring that they continue to maintain their commitment to the organization are essential to social action, Getting and keeping good people is critical to the success of organization, whether profit or non profit, public or private. Those organizations that are able to acquire, develop, stimulate, and keep outstanding workers will be both effective (able to achieve their goals) and outstanding and efficient
Babasabpatilfreepptmba.com
Page 1
“Contemporary Trends in Human Resource Acquisition” (expending the least amount of resources necessary). Those organizations that are ineffective or inefficient risk the hazards of stagnating or going out of business. Survival of an organization requires competent managers and workers coordinating their efforts toward an ultimate goal. While successful coordination cannot guarantee success, organizations that are unsuccessful in getting such coordination form managers and workers will ultimately fail!
To look at HRM more specifically, we suggest that it is a process consisting of four functions – acquisition, development, motivation, and maintenance – of human resources. In less – academic terms, we might describe these four functions as getting people, preparing them, activating them, and keeping them.
Acquisition function: The acquisition function begins with planning. Relative to human resource requirements we need to know where we are going and how we are going to get there, this includes the estimating of demands and supplies of labour. Acquisition also includes the recruitment, selection, and socialization of employees. Development function: The development function can be viewed along three dimensions. The first is employee training, which emphasizes skill development and the changing of attitudes among workers. The second is management development, which concerns itself primarily with knowledge acquisition and the enhancement of an executive's conceptual abilities. The third is career development, which is the continual effort to match long-term individual and organizational needs. Motivation function: The motivation function begins with the recognition that individuals are unique and that motivation techniques must reflect the needs of each individual, Within the motivation function, alienation, job satisfaction, performance appraisal, behavioral and structural techniques for
Babasabpatilfreepptmba.com
Page 2
“Contemporary Trends in Human Resource Acquisition” stimulating worker performance, the importance of linking rewards to performance compensation and benefits administration, and how to handle problem employees are reviewed.
Maintenance function: The final function is maintenance. In contrast to the motivation function, which attempts to stimulate performance, the maintenance functions is concerned with providing those working conditions that employees believe are necessary in order to maintain their commitment to the organization. Within the confines of the four functions – acquisition, development, motivation, and maintenance –many changes have occurred over the years. What once was merely an activity to find a warm body to fill a vacancy has become a sophisticated process of finding, developing, and retaining the best-qualified person for the job. But this metamorphosis did not occur overnight. It is the result of many changes in management thought society and the workers themselves. Let us now look at this transition of personnel. HRM MODEL: In recent years there has been relative agreement among HRM specialists that what constitutes the field of HRM. The model that provided the focus was developed by the American Society for Training and Development (ASTD).' In its study, ASTD identified nine human resource areas: 1. Training and Development 2. Organization and Development 3. Organization/ job Design 4. Human Resource Planning & Recruitments 5. Selection and Staffing 6. Personnel Research and Information Systems
Babasabpatilfreepptmba.com
Page 3
“Contemporary Trends in Human Resource Acquisition” 7. Compensation/Benefits 8. Employee Assistance 9. Union/Labor Relations.
RECRUITMENT Sources for recruitment Depending on the type of job opening, you can recruit qualified staff from several internal and external sources Internal sources: You may have someone in mind that may be suitable for the job. It may be a relative or a close friend. He/she is someone whom you can trust and who is qualified, with the relevant experience. If your business has been ongoing with an existing pool of employees, you may also wish to allow your existing employees the opportunity to be considered for the new job opening. External sources: Depending on your needs and your budget, you may consider the following sources: •
referrals from your business contacts or clients for a suitable candidate
•
advertising in the media
•
post the job opening on online job banks
Babasabpatilfreepptmba.com
Page 4
“Contemporary Trends in Human Resource Acquisition” •
recruit fresh graduates from tertiary institutions
•
walk-in interviews
•
job fairs
•
professional recruitment agencies or government agencies such as WDA
Recruiting Channels Recruiting Channels
Types of jobs
Personal Referrals : Referrals from people you know such as your
Suitable for any type of jobs ranging from top
business associates, suppliers or key customers,
management to production or sales jobs.
which are valuable resources. No cost. Media Advertising: Classified ads in newspapers, trade magazines &
You can choose the right medium for a targeted
journals, radios and TV stations are some of the
group so as to narrow downs your selection.
possible channels to use for various types of job
Advertising enables you to be selective with
openings. Advertising cost varies from press to
specific job descriptions and requirements.
broadcast. Direct Recruiting : Educational institutions (universities,
Suitable for entry-level jobs with no prior work
polytechnics and ITEs) are good sources where
experience required.
Babasabpatilfreepptmba.com
Page 5
“Contemporary Trends in Human Resource Acquisition� graduates can be recruited directly. Walk-in : Retail stores, restaurants and factories often
Instant recruiting for store & sales assistants,
display a 'walk-in interview' sign for hiring.
waiters/waitresses and factory operators.
Online Job Banks : Job postings at online job sites can reach out to a
Suitable for most jobs that require higher literacy,
wider audience, including overseas candidates
skills and foreign talents.
who may have the right skill sets that your business requires. Charges for online ads are generally lower than newspaper ads.
Job Fairs :
For entry level recruiting (graduating students)
Participate in employment promotion events such and mid career switchers (retrenched & retrained as thematic industry job fairs (e.g. IT or
workers). You can interview the maximum
healthcare jobs) and other employment
number of candidates within the shortest possible
facilitation events organised for job seekers.
amount of time.
Recruitment Services : Employment agencies perform the preliminary
Suitable for mid-level, skilled and unskilled jobs.
screening to shortlist likely candidates for your selection at an agreed fee or commission. Executive Search firms or headhunters help companies search for top talents locally and
Suitable for executives & top managerial
internationally. Be prepared to pay a high price
positions or specialists & professionals
for extensive services
Babasabpatilfreepptmba.com
Page 6
“Contemporary Trends in Human Resource Acquisition” Government agencies & organisations : Organizations in collaboration with government
Suitable for all job openings.
agencies such as Singapore Workforce Development Authority (WDA) also provide jobs matching services for employers and job seekers, including retrenched and mature workers who have been retrained with new skills. Associations such as the Singapore Chinese Chamber of Commerce & Industry (SCCCI) and Singapore National Employers Federation (SNEF) also provide free online job postings services for members and employers respectively.
Recruitment practices •
Summarizes the different approaches that can be taken to attract applicants
•
Considers the impact of the Internet on application processes
•
Examines how and when companies use different selection methods
•
Detailed case studies on the recruitment processes at six named organizations
The ultimate aim of any recruitment process is to bring in good-quality new employees by the most objective, cost-effective and swift means possible. The appropriate use of IT can help a company to achieve this goal, but this Study also highlights the durability of traditional recruitment methods and stresses the importance of the human role in selection decisions.
Babasabpatilfreepptmba.com
Page 7
“Contemporary Trends in Human Resource Acquisition� When advertising vacancies, many companies continue to make extensive use of newspapers and the trade press - use of the Internet is common, but is now widely seen as complementary to, rather than replacing, these more traditional methods. However, the potential of technology is being more fully realised in the application process, where specialist software and the development of candidate databases can contribute to a more efficient, streamlined recruitment process. The growing importance of the employer 'brand' in recruitment and of candidates' views of the whole employment proposition are also considered. When choosing which selection methods to use, it is important for a company to strike a balance between gaining a rounded view of the candidate and not using any more procedures than are strictly necessary. The organisations featured in this Study adopt a variety of selection tools, with many placing an increasing emphasis on the initial screening of applicants to filter out unsuitable candidates as early as possible. Thereafter, the face-to-face interview - now increasingly structured and competency-based - remains at the heart of most employers' recruitment processes, supplemented where necessary by psychometric tests and a full assessment centre approach.
Employer recruitment practices The pressure for securing the best candidates, or 'War for Talent', is making a lot of employers think carefully about their recruitment methods, and who they target. Contributing to the pressure on firms is the financial necessity to 'get it right', due to the significant costs associated with the recruitment process, especially for smaller firms. Employers are also becoming increasingly aware of the changing role of technology in the recruitment process, with advancements in the use of the internet and new software complementing more traditional recruitment methods.
Babasabpatilfreepptmba.com
Page 8
“Contemporary Trends in Human Resource Acquisition” Current recruitment methods Many employers currently opt for a selection process that involves initial application (either an application form or CV), interviews and, in some cases, a series of tests. The series of tests often takes the form of an assessment centre. In the article 'Assessment Centres - the best practice?' (Croner webcentre), the author Gill Brewer states that assessment centres are one of the most popular selection methods used by employers and usually involve psychometric tests (ability/personality), a group problem-solving meeting, an in-tray exercise, an interview and a presentation.
Assessment centres According to Brewer, assessment centres are a valid and effective means of selecting recruits but, along with other established means of testing candidates, are struggling to keep pace with changing demands in the workplace and in the light of these changes need to find ways of testing candidates for their ability to: •
work flexibly, integrating work-life and home-life demands;
•
demonstrate emotional competence;
•
demonstrate advanced cognitive abilities - relevant to knowledge management;
•
manage others who work remotely.
As reported in The Independent (4 February 2002), which reports findings from the GTI report Graduate Recruitment Trends, more and more employers are opting to use the kind of tests found in assessment centres in their recruitment practices. Nearly half of the 500 firms surveyed (46%) in 2002 will use psychometric and leadership tests to select graduate trainees compared with 17% in 2000. It is also the case that employers are more likely to demand that graduates show workrelated skills in interviews, with group tasks used to discover natural leaders or those who work well in a team. Presentations are also increasingly requested. While increasing numbers of employers are opting for established recruitment methods such as assessment centres, problems are still being experienced in securing the right person for the job,
Babasabpatilfreepptmba.com
Page 9
“Contemporary Trends in Human Resource Acquisition” with three quarters of the 747 organisations surveyed in the latest Chartered Institute of Personnel and Development (CIPD) survey experiencing recruitment problems. In the light of this, some employers are carefully reviewing their recruitment methods and who they target. Some of the changes being considered include speeding up the recruitment process, offering additional ways to apply for posts, being more flexible in the use of recruitment methods and offering more flexible working hours. Inevitably, technology comes into play in the implementation of some, if not all, of these changes. The role of new technology Many firms are exploring the opportunities presented by advancements in technology, particularly where it could reduce costs and time, complement and improve existing recruitment methods, prove a candidate's ability to use technology and enhance the image of the firm. Indeed, advancements in technology present benefits to both employer and candidate, with graduates enjoying "…the freedom of being able to 'window shop' on-line as part of their job search process” (Institute of Employment Studies 2001). The most widespread use of new technology in recruitment at present, aside from marketing, is the use of online application forms and CVs, with over half of employers using their corporate website in electronic recruitment (CIPD press release, 20 May 2002). A recent survey by online recruiter reed.co.uk (Association of Graduate Recruiters (AGR) news section, 26 April 2002) revealed that most employers actually reject paper CVs in favour of electronic versions. The survey involved 400 firms, of which 80% stated that if they had to choose between two equal candidates, they would favour the one who submitted an electronic CV. Of all firms surveyed, only 15% do not receive any electronic CVs at all. A specific example is KPMG, who introduced an e-selection system in 2000, involving an internet-based CV and questionnaire. The company estimates that this saves 40% of their time, with the computer both receiving and screening CV submissions (AGR news section, 28 February 2001). The ability to screen CVs electronically offers enormous scope for reducing the time and effort that needs to be invested by employers in the recruitment process. According to the article 'CV police get serious' in The Times, CVs are seldom studied in detail by an employer, even though around one in four CVs are thought to have some lie or distortion to hide such things as career
Babasabpatilfreepptmba.com
Page 10
“Contemporary Trends in Human Resource Acquisition� gaps and poor credit history. To assist recruiters in screening applicants, an online candidate verifier system has been produced by Experian, which enables an employer to enter applicants' details to run financial checks. Also, the American data software company SAS has just launched Text Miner, which enables an employer to explore basic facts in a CV, such as whether the university quoted was running the course at that time. This system can also detect the 'perfect' candidate, looking for candidates with attributes of success, eg management skills. Some firms are also thought to be seriously contemplating using lie-detector tests in the future. In addition to online applications, there is also scope for developing 'virtual assessment centres', where candidates complete the exercises online. However, the opportunities presented by technology are not the only avenues of change in the recruitment process, with some employers looking to diversify their intake. Information Technology Sector Analysis Information technology Includes all matters concerned with the furtherance of computer science and technology and with the design, development, installation, and implementation of information systems and applications. Information technology architecture is an integrated framework for acquiring and evolving IT to achieve strategic goals. It has both logical and technical components. Logical components include mission, functional and information requirements, system configurations, and information flows. Technical components include IT standards and rules that will be used to implement the logical architecture. Indian Software Industry From the 1950s, IBM had a virtual monopoly of computers in India. The 360 series release in 1960s was the major workhouse of the large organizations. They even maintained a chain of programmers who could write down software for their machines. However in 1978, when George Fernandes, ministry of industries at that time, commanded IBM to take local shareholders into its subsidiary, the company refused strictly and went back after winding up its all operations in India. Its ex-employees then set up Computer Maintenance Corporation, with the primary object of maintaining IBM computers.
Babasabpatilfreepptmba.com
Page 11
“Contemporary Trends in Human Resource Acquisition” Time has changed the way businesses are carried out. What was supposed to be known to few and limited to the home towns, appears to be an ancient methodology of carrying out the work. The present day brands work on world wide scale, that is they are successful in not just one particular region but have deepened their roots to all the corners in the globe that you can think of. Information Technology is what constitutes the most important sector in the present day trend of carrying out business. It is because you can not be present everywhere to monitor the work, but with networking and communications, you can always stay in contact with the other business sites of yours. India’s development and contribution in world’s information technology sector is of highest reputation. Cities like Bangalore have become the favorite (most preferred) destinations of all the big banners like HSBC, Dell, Microsoft, GE, Hewlett Packard, and several Indian multi national firms like Infosys Technologies, Wipro, and Microland who have set up their offices in the city. It is because the city offers good infrastructure, with large floor space and great telecom facilities. This can be judged on the basis of the high growth statistics of India and the changing outlook of the companies towards India. Indian Software Industry 1995-2000 (US $ million) 1995-96 1996-97 1997-98 1998-99 1999-2000 2000-01* Domestic Market
software 490
670
920
1250
1700
2450
1085
1750
2650
4000
6300
Industry 1224 1755 (* Source: NASSCOM Report)
2670
3900
5700
8750
Software Exports 734 Indian Software
Today, India exports software and services to nearly 95 countries around the world. The share of North America (U.S. & Canada) in India’s software exports is about 61 per cent. In 1999-2000, more than a third of Fortune 500 companies outsourced their software requirements to India.
Babasabpatilfreepptmba.com
Page 12
“Contemporary Trends in Human Resource Acquisition” NASSCOMs survey during 1999-2000 indicates a reversal in the mode of services offered by India. In 1991-92, offshore services accounted 5 per cent and on-site services 95 % of the total exports. However, during 1999-2000 offshore services contributed over 40 percent of the total exports. The NASSCOM - McKinsey report on India's IT industry According to a NASSCOM-McKinsey report, annual revenue projections for India’s IT industry in 2008 are US $ 87 billion and market openings are emerging across four broad sectors, IT services, software products, IT enabled services, and e-businesses thus creating a number of opportunities for Indian companies. In addition to the export market, all of these segments have a domestic market component as well. Other key findings of this report are: Software & Services will contribute over 7.5 % of the overall GDP growth of India IT Exports will account for 35% of the total exports from India Potential for 2.2 million jobs in IT by 2008 IT industry will attract Foreign Direct Investment (FDI) of U.S. $ 4-5 billion Market capitalization of IT shares will be around U.S. $ 225 billion Projected Revenues 2008 ($ US billion)
IT Services Software Products IT-enabled
India
India
Based
Centric
23 8
total
(Internation Domestic
Total
1998
7*
al) 30
8.5
38.5
2.1
2
10
9.5**
19.5
0.6
17
2
19
0.4
5 62
5 25
10 87
0.2 3.3
15 2 Service E-business 4 1 Total 50 12 Exports of $50 billion in 2008 •
Sub
Legacy/client server, ERP and package work and Internet all have different proportions of work outside India where revenues are not export revenues.
Babasabpatilfreepptmba.com
Page 13
“Contemporary Trends in Human Resource Acquisition” •
Resale of imported products included.
According to a recent study conducted by NASSCOM, the chamber of commerce and "voice" of the IT software and services industry in India: Indian Software and Services Exports earned revenues of USD 17.2 billion, registering growth of 34.5 % in FY 2004-05 Total software and services revenue were USD 22 billion in 2004-05. Domestic market revenue grew up by 24% in FY 04-05 Indian Software and Services exports industry is forecasted to register strong growth of around 30-32% in FY 05-06.
Karnataka's IT Karnataka's thriving IT industry is mostly concentrated in and around Bangalore. Lately, other parts of Karnataka have also seen a growth in IT related activity. Some recent developments regarding the industry in Karnataka are described below. Software Technology Parks of Karnataka Software Technology Park of Karnataka, a registered society will implement the IT development policy across the state of Karnataka. STPs have been set up in Mysore, and Manipal, while Hubli and
Mangalore
have
been
identified
for
future
development.
Companies registered under the Software Technology Park (STP) scheme obtain several benefits including those mentioned below: •
Single window government clearance;
•
100% foreign equity permitted;
•
Complete duty free import;
Babasabpatilfreepptmba.com
Page 14
“Contemporary Trends in Human Resource Acquisition” •
Corporate income tax exempted up to 90%;
•
Dedicated data communication links; and
•
Custom bonding and export certification provided at single point.
Software Exports from Karnataka Karnataka's software industry has shown a steady and high growth rate in comparison with other states in the country. Karnataka leads among the major centers in India with the highest growth of software exports in 2000-01 with US $1.58 billion and in 2001-02 with US $2.06 billion (Rs.9903 Crores) as of May 2002. Future of the IT Industry in Karnataka The future plans of the IT industry in Karnataka include the following: •
Establishment of IT backbone;
•
Further development of the industry in secondary cities besides Bangalore;
•
Development of high speed data communications facilities at Hubli and Mangalore;
•
Promotion of private IT Parks;
•
Planning of an IT Corridor from the International Technology Park Ltd. in Whitefield to Electronics City; and Achieving a software exports target of Rs. 11000 crores (US $2.34 billion) in 2001-2002 and Rs. 17000 crores (US $3.5 billion) by 2002-2003. Information Technology Companies at Bangalore.
USA IBM Texas Instruments Hewlett Packard Intel ELXSI Tektronix SK & Beecham Lucent Tech Cisco Systems Hughes Network Associates
T&T Digital Equipments Motorola Novell 3M AMP City Corp Sun Micro Systems Apple Development Honeywell
Babasabpatilfreepptmba.com
Amphetronics Verifone Kodak General Electric Spicer Moog Control Megatromech Analog Devices Oracle Cybercash
Page 15
“Contemporary Trends in Human Resource Acquisition�
Japan Yokogawa
Mitsubishi Komatsu Sanyo
Sony Nissan Toyota
Moog Controls Rolls Royce Alfred Herbert Forbes
British Petroleum Wilkinson Sword Rover
Bosch Siemens
Stump Schule Widia
SAP
Lapp Cables
AFG Fritz Werner Daimler Benz
Citizen Fanuc Sharp U.K British Aero Space Unilever ANZ-IT British Telecom
Germany
France: Bull Alsthom
Citel
Alcatel
Pieco (Philips- Holland) Ericsson
Brooke Bond Rotary Mec Engineering
Others: L&T Britannia Nortel Networks
Classification of Information Technology 1) Product Development 2) Service Development Product Development : Companies create and develop and sell on their force. Ex : Oracle, IBM
Babasabpatilfreepptmba.com
Page 16
“Contemporary Trends in Human Resource Acquisition” Service development : Development according to their client specifications. Ex : Infosys, Wipro Product development companies: Oracle
Wipro
IBM – Mainframes, websphere
Infosys
Yodlie Computer Associates Ariba Pranati HP BEA (Web Logic) Tavant Chip designing
Health Care
Intel
Mysis
Texas Instruments
Wipro
Alliance semi conductions
GE
Incent
Siemens
Automobile
Embedded
Trigent
L&T IT
Tavent
Siemens
Ashok Leyland.IT
LG
Dimen Crister (DEC)
BPL Mistral Sony HP Robert Bosch Celstream Sharp Mashattan Tata Glexsi
Babasabpatilfreepptmba.com
Page 17
“Contemporary Trends in Human Resource Acquisition” Samsung C G Smith Sasken Force computers Banking
Telecom
Iflex
Motorala
Infosys
Siemens
ICICI Infotech
Huges
ANZ IT
Huawai
IBM (S Insurance)
Nokia
Wipro (S Insurance)
Flentronics
I Gate
Ness (telecom Billing)
Majoris
MBT
Hevaware
Zensar
Mysis (S Insurance)
Vodajone
DSL
Philips
Yodlee
Sapken
Sasken
Cable & Windows
Accenture
July Systems
1st Apex (S Insurance)
Kyocera
Fidelity
Telesoft
Ness
Trilogy
TCS
Subex
Henaware
Incent
Patni Perot Systems Companies working on:Java Technology 1st Apex
Aquilla
Mind tree
Shaiuti Soloutions
Accenture
SAP Labs
Babasabpatilfreepptmba.com
Page 18
“Contemporary Trends in Human Resource Acquisition” Tavant
Global Edge
Sun Microsystems
Kanbay
Perutsi
Cap Gemini
Majoris —> Valtech
Oracle
Coransys
Kales
Mphasis
Zensal
I Gate
Patni
Wipro
Blue Star
Infosys
HP
Satyam
EMC2
CGI
LG Soft
Zap App
Raffles
TCS
GE
Aztec
Mysis International
Cognizant
Sharp
Planet Asia
Aalayana
Yodlec
Thomson Jinancials
GXS
L & T Infotech
Symphony
SLK
Ness Technologies
Vmoksha
Netkeaft - Adea
Alit (Ashok Leyland)
IBM
Genesis
DSL
Jonidea
Amsoft
ITC Infotech
ICICI Infotech
Icode
I2
Trigent
Iflex
Crimpson Logic
Goldman Sachs
Mainframe Technology
Techspan
IBM
Fidelity
TCS
Novell
Cognizants
Triba
Majuris
Casitor
Vmoksha
Babasabpatilfreepptmba.com
Page 19
“Contemporary Trends in Human Resource Acquisition” ANZ IT
Myhasis
Sysarsis
CGI
Sonata
Mindiric
HTMT
Infosys (Mysore)
BEA Systems
Sonata
Infinite Solutions
ASL
EXIM soft
ANZ IT
Logic CMC
Infosys (Blr)
I mpelsys
Logic CMG
PSI Data Systems
ICICI Infotech
Convergent Software
Kshema Technology
Data cons
Fidelity
Scandan Solutions
Wipro
Honey Well Microsoft Technologies Accenture (.NET)
Genesis
Mphasis (.NET)
ITC Infotech
Perotsi
Icode
CG Smith
I2
Sharp Software development
Iflex
Manhatta
Trigent
Zyzox
Crimson Logic
Velaskani Software
Fidelity
I Gate
Techspan
Majons
Ariba
Infosys
Aditi NET
Satyam
Tuhisna NET
Tapp Aps
HTMT
TCS
Cellstream
Aztec
FCG (First Consulting)
Wipro
Microsoft
Congnizant
Infinite Solutions
Babasabpatilfreepptmba.com
Page 20
“Contemporary Trends in Human Resource Acquisition” Symphony
Data cons (.NET)
Ness
Shoba Renaissance
Netkraft IBM DSC Global Edge PCS LG Soft GE Mysis Thomson Financial L & T IT
Ware Housing (Data Warehousing) Tavant Igate Iflex Wipro Tata Infotech Accenture Mindtree HP ICICI Infotech Satyam Henaware Infinite Solutions Congnizant
Babasabpatilfreepptmba.com
Page 21
“Contemporary Trends in Human Resource Acquisition” Project Title: Contemporary trends in Human Resource Acquisition Project Contents: Introduction - Concepts of HRA, Recruitment, etc. Objective: - To understand the current trends in recruitment and selection - To explore the reasons for outsourcing these HR functions - To throw light on the role of HR consultants in this process. Findings Reasons for outsourcing Levels of outsourcing Benefits of outsourcing Common myths and perceptions about outsourcing.
ROLE OF HR CONSULTANCY HR Provider The provider role accounts for most of the traditional HR activity in the typical firm and involves the administration of a broad array of traditional HR activities. While the provider role can involve the delivery of any one of a host of HR functions, it will likely be concentrated in routine transactional and specialized activities such as payroll and benefits. The transactional and specialist nature of this role—in contrast to the designer/strategist role—includes many HR activities that can be standardized across firms, allowing for cost reduction through improved economies of scale. Although this form of outsourcing sometimes involves a single vendor providing comprehensive services, companies frequently carve out pieces of the provider role to different outsourcing firms. However, as with the designer/strategist role, this ad hoc approach may result in fragmented outsourcing that inhibits optimal integration of HR activities .
Babasabpatilfreepptmba.com
Page 22
“Contemporary Trends in Human Resource Acquisition” In addition to the fact that this role is more likely to involve activities that can be standardized, the provider role differs from the designer/strategist role in two other respects. First, while the designer/strategist advises clients in creating practices and polices, the provider role focuses on delivery and administration. Second, in contrast to system design, the delivery of traditional HR activities is unlikely to involve strategic level tasks. Professional Employer Organizations (PEO’s) The final category for HR vendors is the professional employer organization (PEO). When firms use a PEO, a co-employer relationship is formed through contractual means. As a result of the contractual agreement, the client maintains control over their workplaces and production, while the PEO becomes the employer of record and assumes responsibility for most of the HR functions.
The PEO handles payroll, provides and administers a benefits package, ensures
compliance with regulations, helps develop safety programs, and provides a host of additional services and trouble shooting assistance that helps manage the client’s workforce. Traditionally, this form of outsourcing has been used primarily by small and medium-sized firms. Because of the unique challenges faced by such firms in managing HR, the benefits available from PEO utilization are likely to be particularly attractive to smaller organizations.
Outsourcing Strategies and Alternative Roles for The HR Vendor While an increased reliance on outsourcing is being observed across organizations large and small, there is substantial variation across firms in the strategy employed to guide the outsourcing process and what activities are actually outsourced. Some firms limit HR outsourcing to the delivery of routine administrative tasks, whereas others outsource activities that are more strategic. Still others outsource the entire design and delivery of HR services and programs. With each approach to outsourcing, the HR vendor will be asked to play very different roles. We believe that when examining the use and impact of outsourcing, it is important to delineate among these different roles. We classify vendor roles into three categories: HR designer/strategist role, HR provider role, and the professional provider organization role.
Babasabpatilfreepptmba.com
Page 23
“Contemporary Trends in Human Resource Acquisition” Overall Use of HR Outsourcing The growth in HR outsourcing is frequently cited as representing a major transformation in the design and delivery of HR management activities. While there is little doubt that HR outsourcing has been expanding, there has been some question as to the precise degree to which this emerging practice is transforming HR management. Recently, however, several surveys have attempted to identify the extent to which HR outsourcing is used. While there are differences reported in the findings, the overall results of these surveys document that HR outsourcing is indeed significant and expanding. For example, a Society of Human Resource Management (SHRM) survey reported that 60% of 437 companies were using HR vendors (Mobley, 2000) and a study by Buck’s Consultants (2000) found that 71% of 225 employers were outsourcing one or more HR activity. And in contrast to broad-based surveys, use of HR outsourcing has been reported to be as high as 93% in surveys restricted to large employers. Other surveys have assessed outside vendor usage by examining the expenditures devoted to outsourcing. With respect to total resources used, a recent study by International Data Corp. (IDC), Leonard (1999) found that U.S. employers now spend 7.3 billion on HR outsourcing expenses. In a study that focused on the proportion of total HR expenditures devoted to outsourcing, it was found that an average of 10% of the typical firm’s total HR budget was spent on acquiring HR services from external providers. HR Outsourcing Trends While these figures show that current usage is significant, the growth rate in outsourcing is also significant. For example, one survey found that 58% of employers now outsource training, compared to 22% in 1996 (HR Focus, 2000). Another survey reported that 56% of respondents intended to increase reliance on outsourcing. Additional evidence of the increasing importance of HR outsourcing is reflected in projected growth in expenditures. The IDC survey projects that expenditures on HR outsourcing could rise by almost 40% by 2003 (Leonard, 1999), whereas respondents in the survey by Klaas and McClendon (1997) reported that the proportion of the average HR budget devoted to HR outsourcing was projected to increase by 60%. Probably one of the most important trends in HR outsourcing concerns the growth in the use of PEO’s. According to the National Association of Professional Employer Organizations (NAPEO), today 1,500 to 1,800 PEO’s oversee 2 million to 3 million American workers who earn $18 billion in annual wages and benefits. The PEO industry— begun only in the early 1980s
Babasabpatilfreepptmba.com
Page 24
“Contemporary Trends in Human Resource Acquisition” —has generated annual revenue growth rates of 25% to 30% while continuing to focus on its core market of small businesses. With respect to future potential growth, PEO’s are used by just 3% of firms with 100 or fewer worker,so there is much room for industry expansion. And given that PEO usage has only started to penetrate some regional markets, optimistic forecasts for PEO growth would appear to well founded. The International Consulting Industry Today: Overview The aims to help clients make the most of their management consulting advice and services through understanding consultants and Consultancy better. There are five different perspectives or lenses through which clients can usefully examine their consulting people, relationships and prospects, five windows on the world of the global consulting community. Each window gives a deep insight into one of the major driving forces that make consultancy tick. It is therefore instructive to consider each viewpoint before major consulting appointments are made or decisions taken. The five perspectives are as follows: Consulting as a significant, competitive growing global industry with its economic scale and impact, markets, segments, brands and players – both firms and individuals who are salaried employees and self-employed Consulting as an international professional community with its standards, ethics, education, training, qualifications, codes of conduct and professional institutes and trade associations Consulting as the products and services that consultants provide, their activities and what they actually do in partnership with their clients. Consulting as the perceptions of the role that consultants play, their image and reputation in the different cultures and communities on the world stage. Consulting as the universal skill of the professional adviser, the personal coach or the counsellor who gives guidance to people and companies. The art and craft of tendering consulting advice which recognizes consulting as a life-skill and necessary competency in the post- employment labor-markets of the digital economy.
Babasabpatilfreepptmba.com
Page 25
“Contemporary Trends in Human Resource Acquisition” Consulting is both very old and very new. States and citizens have sought wise counsel throughout history, often depending literally for their survival on its skill and integrity. Yet the digital economy is revolutionizing consulting delivery and underpinning explosive growth in the consulting networks of international business. E-consultancies have been amongst the most rapid growth stories and the most spectacular failures of the dotcom episode in the electronic revolution. The global consulting industry The global consulting industry is estimated to be worth between US$100 billion and £100 billion in total fee annual revenues, depending on the definitions used. Until recently it has been a predominantly North Atlantic phenomenon with the UK and US combined accounting for more than half the world market and together with Western Europe a full two-thirds of the total worldwide industry as shown in Figure 1.1.1 overleaf.
Figure 1.1.1: Geographical share of world market. Source: Calvert Markham CST However, these are mature markets. The fastest growing consulting economies are those described as ‘the rest of the world’, including Central and Eastern Europe, Asia Pacific, Latin America and Africa. This is big business in any economic analysis and the giant brand name consultancies account for up to half of this revenue while representing approximately one-third of the employment. Yet the majority of consultancy firms are small, with nearly two-thirds of consultants working in consultancies with fewer than 10 employees. Consequently there are the few big brand name
Babasabpatilfreepptmba.com
Page 26
“Contemporary Trends in Human Resource Acquisition” firms employing up to 10, 000 employees each worldwide and then hundreds of thousands of consultants working from small units, often as sole practitioners. There are between 250, 000 and 500, 000 management consultants in the world at the present time, depending on the definition used. The lower figure would approximate to the qualifiable group of potential certified management consultants eligible to put themselves forward for the competence-based CMC professional qualification, awarded in the 35 member countries of the ICMCI to a single global standard. The higher figure would embrace a much wider catchment of professional advisers and subcontractors and would include: technical specialists in IT who are using consulting skills as described above. consultants in professional areas such as public relations and communications and in nonmanagerial recruitment and training, where the management component of the advice is modest or the service provided is more of an outsourced facility (ICMCI 2001 estimates). The growth of consultancy as an industry At the 2001 IMC Consultancy Forum in London, Calvert Markham of Consultancy Skills Training Limited said: It seems hard to remember a time when the large firms of accountants were not also major providers of consultancy. But 25 years ago, we debated whether the accounting firms would ever be serious players.And 10 years ago, the same question might have been asked of major IT companies. The current status of the multinational management consultancies and their recent development is Markham went on to explain the growth of Consultancy as follows: Providing Consultancy services is the result of a natural process of evolution [as shown in Figure 1.1.2]. Product enhancement requires increasing involvement with the customer; the reward is that the customer sees the provider as being of increasing value.So an IT supplier might start by providing a computer (level 1) but then help the customer to maintain and use it (level 2).They go on to help the customer use the computer to automate their existing systems (level 3). Finally – and of most value – they suggest some applications for the computer the customer hasn’t thought of, which will give competitive advantage (level 4).
Babasabpatilfreepptmba.com
Page 27
“Contemporary Trends in Human Resource Acquisition�
Figure 1.1.2: Product evolution. Source: Calvert Markham CST Markham recognizes that there are plenty of businesses that will not follow this evolutionary progression, but suggests that there are two drivers that have prompted many consultancies to adopt this growth path: If a business is set up on the basis of having a differentiated and high- value product, it is difficult for them to make the transition to become a low-cost organization where they can compete on price alone. So they look to the evolution as a means of continued differentiation. Many businesses see consultancy as a way of going higher up the client hierarchy towards the boardroom where higher value projects are authorized. So the typical transition they want to make is that shown in
Figure 1.1.3: Consultancy activities are a means of differentiation and increasing customer intimacy. Source: Calvert Markham CST What consultants actually do This view of consulting studies what consultants actually do and the goods and services they provide. It seeks to understand consulting activity by appreciating the client–consultant relationship and the joint work that they do together.
Babasabpatilfreepptmba.com
Page 28
“Contemporary Trends in Human Resource Acquisition” There are also clearly discernible roles that the consultant under- takes. Research by Williams and Woodward (1994) identified the ‘1 + 7’ model whereby the consultant is primarily recognized as being an ‘expert’ in a particular field. This role as ‘expert’ is central to the consultant but of equal importance to and dependent upon the other seven roles identified by the authors; this is what they actually do, the roles they perform for clients with the expertise that they have: Executive: the managerial role a consultant must assume when carrying out a project for a client Researcher: demands a high level of skill in communication, presentation, interviewing, recording and interpreting quantitative and qualitative data Tutor: in the role of counsellor a consultant helps a client to explore and understand a problem by skillfully questioning, answering, listening and understanding Educator: the educator/trainer enables individuals to acquire new knowledge or skills through clear learning objectives to use in solving an immediate work problem Powerbroker: sometimes in order to achieve objectives a consultant must facilitate change by mobilizing and harnessing sources of power in the client structure Conciliator: getting people to work together effectively who have not done so previously Synergist: enabling individuals to work together and use their talents in new ways. The consulting idea, image and reputation The idea of the consultant is a powerful and evocative one in the media. Perceptions of what people think consultants do and represent in different cultures and communities create a strong image of the sort of work and thinking that consultants are associated with in the press and on television and the Internet. This is often an evocative image but sometimes misleading. Several years ago a UK television programme referred to management consultants as ‘Masters of the Universe’ and this, together with books entitled Dangerous Company and The Witch Doctors, fuelled a popular view of consultants as influential, powerful and somewhat shadowy figures exerting far-reaching influence over companies. The leaders of some of the more fashionable consultancies have even been quoted by social scientists and opinion pollsters as among the most influential people in different societies and within the international business community. Yet the advisory role makes the management consultant an easy target for scape-goating. Professor Colin Coulson-Thomas (1992) found in his research that consultants are the necessary evil that company leaders love to hate. He reported a dilemma that en masse the collectivity of consultants and business schools were regarded as parasites, whereas the individual consultants whom chief executives used as advisers were seen as facilitators and trusted helpers: the image
Babasabpatilfreepptmba.com
Page 29
“Contemporary Trends in Human Resource Acquisition� and idea of the consultant attract opprobrium, while the individual people are recognized for their consulting skill and competency . Consulting skills And it is consulting skill and competency that drive the global consulting networks of the international community. Consultancy is still (after the dotcom bubble burst) a first choice employment for the brightest business graduates from the leading business schools of the world. The brand name consultancies still compete fiercely for the intellectual horsepower that is the raw material of the consultancy process. However, there is an important sense in which we are all consultants now, that consulting competency is no longer the magical secret of the chosen few in the top firms but an efficient management housekeeping skill necessary for the support of making everyday business operate effectively.
Babasabpatilfreepptmba.com
Page 30
“Contemporary Trends in Human Resource Acquisition”
CARNEGIE CONSULTING A DETALIED PROFILE
Babasabpatilfreepptmba.com
Page 31
“Contemporary Trends in Human Resource Acquisition� DO YOU BELIEVE THAT? 1.Good Management is simply using common sense and that common sense is uncommon. Yes/No 2.Companies find it difficult to establish basic customer protocols and internal customer service standards. Yes/No 3.The significance of vision or mission statements are not understand by many individuals in an organization and these statements are not reflected in job goals of the individuals. Yes/No 4.if every individual is expected to work towards organizational objectives. KRA s of all job positions should be the same. Yes/No 5. Often in Indian organizations, performance standards are not always clearly defined, and if defined, they do not reflect global standards. Yes/No 6.Members in an organization function most of the time as a group and not as a team. Yes/No 7.Effectiveness of training is not measured in quantifiable terms in most organizations. Yes/No 8.There is as much wastage of people power skills as there is wastage of materials, equipment and time due to lack of effective work systems and methods. Yes/No
Babasabpatilfreepptmba.com
Page 32
“Contemporary Trends in Human Resource Acquisition” 9.Most Indian management and technical professionals must improve their basic executive skills, if they are to function in a global economy, since skills are not even taught by reputed engineering and management institutions in the country. Yes/No
10.Management models must be simple and implementable and relevant to the cultural context of the organization. Yes/N o
IF YOU ANSWER IS “YES” TO MOST OF THE QUESTIONS, THEN READ ON…
Babasabpatilfreepptmba.com
Page 33
“Contemporary Trends in Human Resource Acquisition�
CARNEGIE CONSULTING Is a consortium of reputed management professionals whose diverse expertise has empowered the performance of the many reputed organizations and strengthened the technical and managerial competences of their members. We can help secure your future.
Our vision Assessing, building, and strengthening, technical & managerial competency for improving the performance of your organizations.
We offer People power search and resource consulting services ( technical and management professionals for corporate organizations in the information technology, banking and financial services, engineering, health, bio technology, energy, hospitality, and fast moving consumer goods, retail sectors and call center).
Babasabpatilfreepptmba.com
Page 34
“Contemporary Trends in Human Resource Acquisition” Management consulting and research services (establishing integrated HR systems and processes and conducting compensation and attitudinal surveys and developing and implementing employee stock option schemes etc…) Capability building or training services (executive and managerial skill and perceptive development, identification and evaluation of competencies. Etc…) Personality profiling and testing services.
Our Mission
Our mission is to help organizations to improve their financial performance, internal and customer satisfaction and achieve growth and competitive advantage through systems and process improvement and capability building
Babasabpatilfreepptmba.com
Page 35
“Contemporary Trends in Human Resource Acquisition�
GENESIS AND CLIENTELE Carnegie consulting- Secure your future. Consult with the best. Carnegie consulting was established in 1996. it is the only Indian human resource and development organization, which has developed a successful human resource management consulting model CARES and the company has used this
Babasabpatilfreepptmba.com
Page 36
“Contemporary Trends in Human Resource Acquisition” model to diagnose the health of many organizations and in formulating Hr systems, polices, procedures and process standards. Carnegie consulting is the only organizations which uses the select methodology for its people power search services” in order to ensure that the client organizations recruit competent professionals and establish brand equity amongst professionals. Carnegie consulting is the only organizations, which uses “ACTION LEARNING METHODOLOGY” in its capability building programs in order to ensure that these programs lead to tangible results. A
“structured
approach
is
used
in
research
and
in
conducting
surveys
(compensation/attitudinal/employee satisfaction etc…) and in the development of productivity improvement assessment and team building tools and products as well as in formulations of effective employee stock option schemes.
Babasabpatilfreepptmba.com
Page 37
“Contemporary Trends in Human Resource Acquisition”
SERVICES OFFERED BY CARNEGIE CONSULTING
Babasabpatilfreepptmba.com
Page 38
“Contemporary Trends in Human Resource Acquisition”
PEOPLEPOWER SEARCH AND RESOURCE CONSULTING SERVICES
Babasabpatilfreepptmba.com
Page 39
“Contemporary Trends in Human Resource Acquisition”
Types of the search services: Carnegie consulting offers selection services either one – off or integrated basis. Our search services inclides the following services and products b.1. selection test design services. b.2. recruitment and selection services- three plans/ products b.2.a. premium recruitment cost saving plan (PRCSP)- on exclusive basis: Carnegie consulting pvt ltd.. offers exclusive search services under this plan. Carnegie consulting pvt ltd… will create search desks in all its branches to recruit high quality candidates from all the metros. Carnegie consulting pvt ltd… will do the preliminary screening, technical, executive and managerial skill evalution, attitudinal assessment profiling. Carnegie consulting will finalise shortlists for interviews, facilitate salary negotiations, issue of the appointment letters and induction of the candidate. Carnegie consulting pvt ltd..will dedicate 2 or more executives at the site to co-ordinate interviews, undertake first impression report after one month of the candidate joining the organization. Carnegie consulting pvt ltd… will be responsible to meet mutually agreed recruitment’s targets.
Babasabpatilfreepptmba.com
Page 40
“Contemporary Trends in Human Resource Acquisition”
Benefits to the client: Timely availability of quality professionals at 50% of recruitment’s costs. Substantial savings in time spent by senior mangers in recruiting Savings in the cost of induction Screening of candidates in all metros for a given position in a given location. Reach- screening of potential candidates in all metros.
b. 2. b. Time Saving search services Plan (TSSSP) •
Carnegie Consulting Pvt. Ltd., offers following search services under this plan.
•
Carnegie Consulting Pvt. Ltd., will undertake recruitment on non-exclusive basis.
•
Carnegie Consulting Pvt. Ltd., will do the preliminary screening, technical executive and managerial skill evaluation, attitudinal assessment and profiling.
•
Finalising shortlists for interviews.
•
Carnegie Consulting Pvt. Ltd., will post one executive at site to coordinate interviews and facilitate salary evaluations and issuing of appointment letters.
Benefits to the client:
Babasabpatilfreepptmba.com
Page 41
“Contemporary Trends in Human Resource Acquisition” •
Substantial saving of senior managerial time.
•
Availability of quality manpower on time.
•
Reach – Screening of Potential candidates in all Metros.
b.2.c. Quality Peoplepower Availability Plan ( QPAP ) •
Carnegie Consulting Pvt. Ltd., will undertake recruitment on non-exclusive basis.
•
Carnegie Consulting Pvt. Ltd., will undertake recruitment on non-exclusive basis.
•
Search and preliminary services on exclusive basis.
•
Preliminary screening, technical evaluation and attitudinal profiling can be offered as a special service.
Benefits to the client : •
Availability of quality manpower on time.
•
Reach – Screening of potential Candidates in all metros.
Babasabpatilfreepptmba.com
Page 42
“Contemporary Trends in Human Resource Acquisition”
MANGEMENT CONSULTING AND RESEARCH SERVICES
Babasabpatilfreepptmba.com
Page 43
“Contemporary Trends in Human Resource Acquisition”
BACKGROUND Carnegie Consulting helps organizations to improve their performance and gain competitive advantage through its consulting and research services.
TYPES OF CONSULTING AND RESEARCH SERVICES •
Management Research and Organizational diagnostic study using “CARES” model.
•
Formulating and implementing HRD Strategy, Policies, Systems and Processes.
•
Establishing “ Values Orientation” in organizations.
•
Operationalising “ Vision” Statements in terms of measurable process standard.
•
Establishing effective Performance Planning, Performance Assessment and Competence Development Systems.
•
Formulating Customer Relationship Building Protocols and Service Standards.
Babasabpatilfreepptmba.com
Page 44
“Contemporary Trends in Human Resource Acquisition” •
Developing Customer Service Standards and conducting Customer service Audits.
•
Formulating and implementing Employee Stock Option Plans.
•
Conducting Surveys pertaining to Member Satisfaction, Compensation and Leadership Effectiveness.
•
Conducting Competency identification Assessment and Development programs.
•
Managing HRD function of organizations on an outsourcing basis.
•
Helping organizations to forge strategic alliances as well as find appropriate markets for their products in India.
•
Incubating the Indian operations for multinational / transnational clients.
CAPABILITY BUILDING Babasabpatilfreepptmba.com
Page 45
“Contemporary Trends in Human Resource Acquisition”
OR TRAINING SERVICES
BACKGROUND Carnegie Consulting has conducted more than 400 capability Building programs using “ Action Learning Methodology” which ensures that the training programs lead to measurable results for the client organizations. OFF-THE JOB TRAINING PROGRAMMES FOR IT AND NON-IT PROFESSIONALS
Babasabpatilfreepptmba.com
Page 46
“Contemporary Trends in Human Resource Acquisition” •
Value workshops
•
Executive and managerial soft skill development programs for IT and Non-IT professionals ( Communication – Listening, Writing, Speaking and Oral presentation Interpersonal, thinking, Negotiation, Process Observation and Leadership and Team building and outbound ).
•
Objective Self-Assessment.
•
Leadership and Team Building for Project Managers.
•
Counseling and Coaching skills for Managers.
•
Goal Setting and Performance Appraisal & Career Counseling skills for Managers.
•
Building relationship with customers and improving customer service standards.
•
Field and Retail Selling Skills.
•
Competency Identification and Evaluation.
•
Business Strategy Development.
•
Management of Change.
•
Competitive strategy formulation skill for senior managers.
•
Turn around management for senior managers.
•
First Time Supervisory skills for executives.
•
Leadership & team building workshop
•
How can you establish an effective & integrated target setting, performance appraisal and career development system ?
•
How to work together and achieve team cohesiveness – a structured sensitivity training workshop.
•
Retail selling skills / retail sales management workshop.
•
Field Selling Skills.
On- the job distance learning Programmes •
Diploma in managerial skills for professional managers ( On the job training programs through self learning modules).
Babasabpatilfreepptmba.com
Page 47
“Contemporary Trends in Human Resource Acquisition” •
Certificate of Professional Salesmanship.
•
Diploma in Manufacturing Management.
•
Becoming an Effective Team Leader.
•
Customer Relations & implementing Customer Service standards.
Diploma in Executive skills for professional executives ( On the Job training programs through self-learning modules).
Babasabpatilfreepptmba.com
Page 48
“Contemporary Trends in Human Resource Acquisition”
WHAT SOME OF OUR CLIENTS HAVE TO SAY……….. We appreciate Mr. N. Shekar of Carnegie Consulting for holding a workshop on Goal Setting and Appraisal in the area of Performance Management and introducing the “Cares” model. This model and the methodology are practiced successfully. We recommend to our group companies to adopt this model and introduce the meaningful change. Mr. Shekar Arora, DGM (Management Development) Ashok Leyland, Corporate We are happy and pleased with the response and customer engaged skills of Carnegie Consulting and their team’s persistence and perseverance. Mr. K. Venkatachalam, Chief HR Officer Huawel (Bangalore) Business Operations “Cares” model was very helpful in identifying key issues that needed to be addressed to improve the health of the organization in terms of employee satisfaction. We certainly recommend the implementation of the “Cares” model for companies seeking to establish effective HR system and processes. Mr. Shyamal Dasgupta, General Manager – HR Mascot System (A Subsidiary of Mastech System Corp – USA) We were impressed by the workshop conducted by Carnegie Consulting on “Skills Development”. The feedback was unanimous in respect to benefits the participants had gained by the workshop. Mr. Vevek Chettur IBM Global Services (I) Pvt. Ltd., We are happy with Carnegie Consulting for their excellent services provided towards recruitment. Mr. Sundarajan, Managing Director Mr. Murali Santhanam, Head – HR ANZ Information Technology
Babasabpatilfreepptmba.com
Page 49
“Contemporary Trends in Human Resource Acquisition” The Soft skills development programme organized by Carnegie was immensely useful to our Service Delivery Managers and Team Leaders. We in Tracmail would like to thank especially Mr. Shekar for having taken the trouble to understand our needs us in our effort to improve productivity, leadership competence and team satisfaction. Mr. Arjun Vaznaik Chief Operating Officer Tracmail The workshop conducted on HR (Strategy, Policies, Systems and Processes) was very effective and thought provoking. It has helped us to be more focused and result – oriented. Mr. Bunty Peerbhoy MAA Group Holdings The facility and ease with which you conducted your valuable training program was greatly appreciated by me and my colleagues. It was highly interesting and educative. The way you combined learning with fun and insights impressed us very much. I am sure the performance assessment by our Managers will not be the same henceforth; it will be of much superior variety. A.V.R. Rao Head – Legal & Company Secretary ANZ Information Technology Private Limited.
Babasabpatilfreepptmba.com
Page 50
“Contemporary Trends in Human Resource Acquisition”
PROFILES OF MEMBERS AND ADVISORS
Babasabpatilfreepptmba.com
Page 51
“Contemporary Trends in Human Resource Acquisition”
MEMBERS Mr. N. Shekar He holds an MBA from Baja Institute of Management and has more than 24 years of work experience. Mr. N Shekar has held senior management positions in many Indian & multinational organizations like ITC, VOLTAS Ltd, Wipro, Computer Point, United Breweries, International Hospital of Bahrain etc. Having helped many companies to set up HRD Systems and processes, he has also developed a HRD management model called “CARES’ which been used by companies like Ashok Leyland, Oracle, Micro land, Indus-league etc. He has trained more than 4000 executives and around 2500 mangers in the past 20 years. His work assignment has taken him to a variety of countries such as U.S, South Africa, Egypt, Middle East, Germany etc. What’s more, he was instrumental in negotiating and collaborating with Harvard Extension University for setting up an India-based Educational Project. Presently Mr. N Shekar is a consultant for many leading Indian companies and is also on the advisory educational board set up by Spencer, which is part of the R.P.G Group and is a certified Administrator of Thomas Personal Profile Analysis and its related instruments.
Babasabpatilfreepptmba.com
Page 52
“Contemporary Trends in Human Resource Acquisition”
CARNEGIE'S SWOT ANALYSIS The SWOT Analysis of Carnegie Consulting Internal Environment Analysis: This analysis considered strengths & weakness of the Firm. External Environment Analysis: This analysis considered opportunities & threats of the Firm . Internal Environment Analysis: The analysis helps the Carnegie to identified strengths & weakness so as to facilitate continuous development of the firm. Strengths: •
Strong client relationship
•
Effective leadership of Managing Director
•
Huge database of candidates
•
Growing sector
•
Rich experience in Consultancy services
Babasabpatilfreepptmba.com
Page 53
“Contemporary Trends in Human Resource Acquisition” Weakness: •
Poor Infrastructure
•
Low employee morale
•
Assisting mainly for recruitment’s
External Environment Analysis: The opportunities are looked into the external environment, for improving the business of the firm. The Threats give details about the possible future challenges that would be faced by the organization. Opportunities: • Exploring new different sectors •
Adding up new clients
•
Taking different technology
•
Expansion of Consultancy services to other cities
Threats: •
Competition from other leading manpower Consulting firm.
•
Working only for Information Technology requirements.
Babasabpatilfreepptmba.com
Page 54
“Contemporary Trends in Human Resource Acquisition”
CARNEGIE’S CLIENTS PROFILE Babasabpatilfreepptmba.com
Page 55
“Contemporary Trends in Human Resource Acquisition�
AZTEC Corporate Overview: Aztec Software is a software and technology services company. Its specialty is software product development services that accelerate the creation of software products, reduce time to market and help make schedules predictable in order to better manage resources, predict costs, and reduce market and technology risks Founded in 1995, Aztec has completed more than 60 customer projects with globally known software companies like Microsoft, Cadence, IBM, JD Edwards, Novell and many more.
Babasabpatilfreepptmba.com
Page 56
“Contemporary Trends in Human Resource Acquisition” Aztec offers a wide gamut of services for software product development: •
Application development: Complete product development including architecture, design, and engineering
•
Testing and QA: Thoroughly and efficiently testing applications under a variety of conditions and configurations
•
Maintenance and support: All the services required to support post-launch software
•
Migration and porting: Across application servers, databases and platforms
•
Aztec also offers software application implementation services for enterprise IT including software development, migration, testing and QA, systems integration, and maintenance & support services.
Aztec completed its IPO in 2000 and is listed on the Mumbai Stock Exchange and National Stock Exchange in India. The company has its headquarters in Santa Clara, CA, with offices in London and an offshore development center in Bangalore, India. In today's world, enterprise applications need to conform to the corporate infrastructure, security frameworks and interoperate with other applications. With advent of Service Oriented Architectures, implementing enterprise solution has become increasingly complex.
Implementing solutions require deep understanding of standards, .NET and J2EE frameworks, commercial application platforms such as WebSphere and Weblogic, middleware products such as TIBCO and webMethods and open source stacks. Data management expertise from database design, ETL, data warehousing to analytics is also required for most implementations. Aztec Implementation Services extend our global delivery model to implementation of complex software products in enterprises. We leverage our deep expertise in core technologies (data management, middleware and integration engineering), proven methodology and our comprehensive experience in the entire software product lifecycle (including porting/migration) to bring the right solution every time.
Babasabpatilfreepptmba.com
Page 57
“Contemporary Trends in Human Resource Acquisition” Tavant Technologies Transform your organization into a web-services enabled enterprise •
Tavant Technologies is an enterprise software and services company offering advanced products and solutions that enable collaborative commerce and integrate enterprise applications.
•
Using Tavant's suite of solutions, your enterprise can automate transactions within your channels and make important channel partner information fully available to all participants. This results in improved visibility, lower costs, fewer errors, and improved brand equity. Tavant can deliver more value to your enterprise by offering:
•
A more visible channel: Tavant solutions identify exactly where inventory is, allowing you to avoid inventory bulges and enhance profitability. Everyone from marketing to sales to finance can leverage increased visibility into what is actually happening in the channel.
•
More market share and a competitive advantage: Tavant solutions effectively enable collaboration across business units and throughout the channel. We enhance your ability to deliver a solution that will improve your channel partners' business.
•
Strategically focused applications: Tavant solutions enable you to leverage existing business processes and systems, and help you transform your organization into a web services-enabled collaborative commerce enterprise.
•
An inexpensive, quickly deployed solution: Our software development team in Bangalore, India gives you the cost benefits of offshore development a cost effective solution that can be deployed in as little as 120 days, or sometimes in as little as 90 days
About IBM At IBM, we strive to lead in the invention, development and manufacture of the industry's most advanced information technologies, including computer systems, software, storage systems and
Babasabpatilfreepptmba.com
Page 58
“Contemporary Trends in Human Resource Acquisition� microelectronics. We translate these advanced technologies into value for our customers through our professional solutions, services and consulting businesses worldwide. Business operations: Hardware Servers Storage Personal systems Printing systems Retail store solutions Software Connect operating systems, business processes, and applications seamlessly. Services Comprehensive IT services integrated with business insight to reduce costs, improve productivity, and assert competitive advantage. Financing A leading provider of financing and asset management services to companies selling or acquiring IT related products and services.
ANZ IT Babasabpatilfreepptmba.com
Page 59
“Contemporary Trends in Human Resource Acquisition” Welcome to ANZIT - a CMM Level 5 Company. We have an enviable track record of providing technology solutions to customers in banking and financial services internationally. Our solutions have been home-grown within major banks and have delivered positive business results. Our insights into banking significantly minimizes the adoption and implementation risk associated with large scale technology initiatives. In short....When you work with us, you are Banking on experience. Technology Domain: Banking Retail Staff self-service Corporate banking Cards and Payments ANZ Information Technology Private Limited ('ANZIT') is a 100% fully owned subsidiary of the Australia and New Zealand Banking Group Ltd (ANZ), headquartered in Melbourne Australia. ANZ Information Technology is a leading provider of end-to-end solutions to ANZ Bank worldwide. ANZ is one of the top 100 banks in the world with assets over US$105 billion, 23,000 employees, ROE in excess of 20%, cost-income ratio in the 40's. ANZ's key businesses include: •
Personal banking (mortgages, branch banking in metro and rural areas, wealth management, small business, Cards and Payments).
•
Corporate (institutional banking, global foreign exchange, structured finance, global transaction services and global capital markets.
•
International and subsidiaries (businesses in Asia-Pacific, ANZ investments, Asset Finance).
ANZ has a Joint Venture with ING to provide Funds Management products and services.
Babasabpatilfreepptmba.com
Page 60
“Contemporary Trends in Human Resource Acquisition” The Information Technology Division of ANZ includes over 2500 staff located principally in India (Bangalore), Australia(Melbourne) and New Zealand(Wellington). ANZIT in Bangalore is set up as a 100% Export Oriented Unit under the 100%EOU/STP scheme of the Government of India. In today's global competitive financial services environment, ANZIT is one of the few companies providing end-to-end, integrated solutions Designed and implemented with our industrial-strength methodologies, our solutions provide fast, measurable return on investment (ROI) and are customizable to meet your business' unique needs. Our business partners take these solutions to customers in far-flung corners of the world. Our partners are reputed organizations who have a well-established customer base in the financial services industry. If you would like to find out if there is a ANZIT business partner in your country/region, drop us a line and we will have our partners get in touch with you.
GLOBAL EXCHANGE SERVICES Global eXchange Services (GXS) is a leading worldwide provider of business-to-business integration, synchronization and collaboration solutions. The company operates a highly-reliable, secure global network services platform enabling more than 30,000 businesses, including over half of the Fortune 500, to conduct business together in real time. We offer an extensive range of solutions to help companies, both large and small, connect worldwide with their business partners, synchronize product and price information, optimize inventory levels and demand forecasts, and speed the overall execution of their global supply chains. With the broadest array of capabilities and an unsurpassed worldwide reach, GXS ensures No Trading Partner is Left Behind™.
Babasabpatilfreepptmba.com
Page 61
“Contemporary Trends in Human Resource Acquisition” In June 2002, GXS was acquired by Francisco Partners from General Electric Company (GE) and now operates as an independent firm. GE retains a minority investment in GXS. Francisco Partners is one of the world's largest technology-focused buyout funds with over $2.5 billion of committed capital under management. For more information on Francisco Partners
Industries: Retail Consumer Products High-Technology Manufacturing Automotive
IGATE GOLBAL SOLUTIONS Vision To be the gold standard integrated technology and operations company offering business value through innovative and cost-efficient service delivery models to customers worldwide. Overview iGATE Global Solutions is the first fully integrated technology and operations firm with a global services model. iGATE Global enables clients to optimize their business through a combination of process investment strategies, technology leverage and business process outsourcing and provisioning. Services include consulting, IT Services, Data Analytics, Enterprise Systems, BPO/BSP, Contact Center and Infrastructure Management Services. Going beyond one time labor arbitrage, iGATE’s iTOPS model assures clients of year on year savings by process and technology optimization, access to proprietary tools and accelerators and migration to best in class processes. The iTOPS model also allows clients to convert fixed costs to variable costs and manage business spikes and troughs more efficiently. Services are delivered a unique pay-by-the-drink transaction pricing model that is directly linked to the business value delivered to our clients.
Babasabpatilfreepptmba.com
Page 62
“Contemporary Trends in Human Resource Acquisition” Highlights: •
Flagship company of iGATE Corporation, a NASDAQ listed, US based corporation.
•
Part of InformationWeek’s ‘Managing Offshore Index’ featuring 20 of the most influential outsourcing firms in the U.S. and overseas
•
We work with 50 percent of the top 10 Global Brands
•
Cultural diversity around 10%, Gender diversity around 18%
•
6 Development Centers, 2 BPO Delivery Centers and 16 Representative Sales offices Across the Globe
Verticals: Insurance Banking Retail Financial markets group.
TESCO Company Profile •
Tesco is a British company, registered in the UK. Tesco is principally a food retailer, selling a range of food and non-food items through a network of stores in the UK, Europe and South East Asia.
•
Tesco has stores in 13 countries: UK; Republic of Ireland; Czech Republic; Slovak Republic; Hungary; Poland; Turkey, Thailand; China; Taiwan; South Korea; Malaysia; and Japan.
•
Tesco does not manufacture, invest in or sell armaments, pornographic material or nuclear power.
•
Tesco does sell tobacco and alcohol products such as beers wines and spirits in strict compliance with the laws of the countries where TESCO have store. Tesco sells a range of own brand and branded food and non-food products, as well as a range of organic and Fairtrade certified products.
Babasabpatilfreepptmba.com
Page 63
“Contemporary Trends in Human Resource Acquisition” •
Tesco has adopted policies covering Human Rights, Worker Welfare, Animal Welfare, Animal Testing, Genetic Modification, Environment, Climate Change, Corporate Responsibility, Ethical Trading, Health and safety, Community, Charity, Ethics, and the DTI Code of Conduct on Supermarkets' Dealings with Suppliers.
Strong UK core business: The UK remains our core market with 1,878 stores. Our strategy of providing customers with exceptional value and choice continues to drive our growth.
Non-Food: Our non-food business is becoming more popular with customers as it grows, both in the UK and in our international operations. Retailing Services: As customer lifestyles change TESCO continue to provide new products and services, including Tesco.com, Tesco Personal Finance and Tesco Telecoms. International: TESCO now operate 440 stores in 12 international markets. TESCO employ 326,000 people world-wide, working in 2,318 stores, with total sales of £33.6 billion.
Tata Consultancy Services Tata Consultancy Services Limited (TCS) is the world-leading information technology consulting, services, and business process outsourcing organization that envisioned and pioneered the adoption of the flexible global business practices that today enable companies to operate more efficiently and produce more value. We commenced operations in 1968, when the IT services industry didn’t exist as it does today. Now, with a presence in 33 countries across 5 continents, & a comprehensive range of services
Babasabpatilfreepptmba.com
Page 64
“Contemporary Trends in Human Resource Acquisition” across diverse industries, we are one of the world's leading Information Technology companies. Six of the Fortune Top 10 companies are among our valued customers. TCS is part of one of Asia's largest conglomerates - the TATA Group - which, with its interests in Energy, Telecommunications, Financial Services, Chemicals, Engineering & Materials, provides us with a grounded understanding of specific business challenges facing global companies
When we commenced operations in 1968, we pioneered the offshore delivery model for IT services. Today, with a presence in 33 countries across 5 continents, & a comprehensive range of services across diverse industries, we are one of the world's leading Information Technology companies. Six of the Fortune Top 10 companies are among our valued customers.
Mission, Vision & Values While the reason for our existence is articulated by our Mission, our vision reflects an aspiration to continually improve, to excel & be the best. Our values characterize us as an organization & guide our every action. Mission To help customers achieve their business objectives by providing innovative, best-in-class consulting, IT solutions and services. Make it a joy for all stakeholders to work with us. Vision To be among the global •
Values
•
Integrity
•
Leading Change
•
Excellence
•
Respect for the Individual
Babasabpatilfreepptmba.com
Page 65
“Contemporary Trends in Human Resource Acquisition” •
Learning and Sharing
Ness Technologies Ness Technologies (NASDAQ: NSTC) is a global provider of end-to-end IT services and solutions designed to help clients improve competitiveness and efficiency. Specializing in outsourcing and offshore, systems integration and application development, software and consulting, and quality assurance and training, Ness serves a blue-chip client base of over 500 public- and private-sector customers. With an over-5,000-strong workforce, Ness maintains operations in 15 countries across North America, Europe and Asia Pacific, and more than 100 alliances and partnerships around the world. Ness’ “best-shore” capabilities streamline service delivery and address the full range of client needs. Company Profile Ness Technologies (NASDAQ: NSTC) is a leading international provider of comprehensive endto-end IT services and solutions. Ness offers a unique global delivery model of innovative, highquality, value-added services that enable organizations to attain sustainable competitive advantage. Leveraging our world-class delivery capabilities, technological talent, strategic partnerships with major vendors, and growing client base, Ness is fast becoming a key player in the global IT services makert. The Ness portfolio of services and solutions includes outsourcing and offshore, systems integration and application development, software and consulting, and quality assurance and training. With offices in 15 countries across North America, Europe, and Asia Pacific, an over5,000-strong workforce, and an international network of offshore facilities, Ness integrates local expertise with worldwide resources to offer a global delivery model to our clients. Dedicated to providing the very best IT products and services while guaranteeing technological independence, Ness has forged close alliances with world-leading software and hardware vendors. We also are committed to establishing long-term relationships with our growing client base of over 500 active customers.
Babasabpatilfreepptmba.com
Page 66
“Contemporary Trends in Human Resource Acquisition”
Business Focus Outsourcing and Offshore: Ness provides clients a wide range of outsourcing services that enhances flexibility, lowers costs and maximizes employee productivity. Ness has established fully operational offshore facilities in India, the Slovak Republic and Israel to optimize our service offerings. In addition, we operate extended development centers for world-leading independent software vendors (ISVs) that are fully compliant with CMMI requirements. Systems Integration and Application Development: Ness delivers comprehensive systems integration services including planning, design, implementation, training and support. Our systems integration and application development services cover an array of areas, such as ERP and CRM, enterprise application integration, command-and-control systems, telecom systems, knowledge management, and business intelligence and data warehousing. Software and Consulting: Ness provides a range of related offerings including: Product representation – Ness has established partnerships with over 30 leading international software vendors to resell and support their products. Proprietary and turnkey solutions – Ness offers customized applications aimed at verticals in which we have substantial intellectual property as well as unique turnkey development capabilities.
Clients and Key Verticals: Ness places great value and spares no effort in establishing solid, long-term client relationships, which represent the driving force behind our current and future success. The results speak for themselves, with the vast majority of our revenues stemming from repeat clients. Ness maintains a blue-chip client base, including Fortune 1000 and Global 2000 companies, across all verticals in which we operate. Ness has accrued particular domain expertise and experience in five sectors: government and defense, financial services, telecom and utilities, life sciences and healthcare, and high-tech and independent software vendors (ISVs).
Babasabpatilfreepptmba.com
Page 67
“Contemporary Trends in Human Resource Acquisition” Selected clients in these verticals include: •
Government & defense: Lockheed Martin, Israel Defense and Justice Ministries
•
Financial services: Credit Suisse, Citibank, Generali Group, Bank Hapoalim
•
Telecom & utilities: AT&T, Orange, Czech Telecom, Israel Electric Corporation
•
Life sciences & healthcare: Pfizer, Johnson & Johnson, Serono
•
High-tech & ISVs: Business Objects, Chordiant, Check Point
Partners Ness maintains an expanding network of over 100 strategic alliances and partnerships with leading global software, infrastructure and consulting vendors, thereby guaranteeing delivery of the best available solutions. Selected key partners include: Microsoft – Gold Partner, winner of Partner of the Year and numerous other awards SAP – Provider of SAP professional services worldwide and SAP distributor in Israel EMC – Global partner for Documentum systems and sole Documentum distributor in Israel IBM – Hardware and software partner in the U.S. and Asia BEA Systems – Partner for EAI platform and solutions delivery
Outsourcing Introduction First of all let’s see What Is Outsourcing? Outsourcing in broad terms is a transfer of some business functions or components of business processes to an outside contractor. To remain
Babasabpatilfreepptmba.com
Page 68
“Contemporary Trends in Human Resource Acquisition� competitive, many companies outsource as a way to reduce costs, increase efficiencies, and refocus critical resources. For example, many organizations have their own IT departments catering to their software and other IT enabled services needs; while others go for IT outsourcing. According to one estimate from IDC, total global outsourcing services spending are expected to reach US$151 billion by 2003. So we wonder if you still looking for an answer to your question: What Is Outsourcing? Instead you should ask now what outsourcing can done for you and how? But we will try to answer your What Is Outsourcing question with as much care as we can, so that you can grasp the concept in your deep within. Outsourcing can be an extremely complex and complicated undertaking. Each facet of the exercise needs to be carefully considered and properly executed. There is little margin for error if full value is to be obtained. However, What Is Outsourcing question need not be a trauma, or an adventure of blind exploration. The potential benefits are well documented, and strategic outsourcing is now mature enough for the path to have been trodden countless times previously. But how do you ensure that the lessons learned by others (sometimes the hard way) are put to good use? How do you ensure that you don't re-invent the wheel repeatedly? How do you manage the whole exercise as effectively and efficiently as possible? To answer all these queries you should first understand What Is Outsourcing question completely. Whenever, you are entering into any outsourcing deal on the behalf of your company you should try to find answers to all your questions. Till then you can use various tools and softwares available in the market to understand What Is Outsourcing question along with some of your initial queries. Outsourcing to India Outsourcing to India seems to be the biggest trend during the recent past. It has number of reasons why more and more companies are looking forward to Outsourcing to India. If we put other factors apart the strongest reason for Outsourcing to India is the human talent this country has and that too at very low rates. Twelve months ago, anybody suggesting that India's economic growth will exceed 7 per cent in the coming fiscal year (ending March 2004), that its equity market would be up 80 per cent in US dollar terms and its foreign exchange reserves will cross US$100 billion, would have met with skepticism, if not downright disbelief.
Babasabpatilfreepptmba.com
Page 69
“Contemporary Trends in Human Resource Acquisition� Well that is precisely the performance the Indian economy has just turned in. Along the way, it has shattered a few myths which India-watchers (especially skeptics) have long believed. The first myth while Outsourcing to India is that fractious coalition governments in a noisy democracy like India cannot deliver high growth. Well, it just did. Despite their rivalries and their bickering, all of India's major political parties basically agree on most structural reforms - the need for a greater emphasis on growth rather than redistribution; clearer policy frameworks in infrastructural areas like power, telecoms and roads; more open policies on external trade and foreign investment; more aggressive slashing of red tape; and faster fiscal and financial reforms. Only in labor reforms and privatization are there significant differences of view, with a minority of (mostly left-leaning) parties lobbying for a slower pace, but yet when it comes to Outsourcing to India the companies are getting what they want. The second myth while Outsourcing to India is that high growth is not possible without highquality infrastructure. India's infrastructure remains far from adequate (barring, perhaps, the telecoms sector), yet, growth has been good and more and more companies are Outsourcing to India. It is probably true however, that this is unlikely to be sustained without infrastructure development. But this is now finally happening in India: the country's construction industry (as well as capital goods industries like steel and cement) is in overdrive, feeding a frenetic nationwide road-building program, a housing boom, and the building of hundreds of malls, multiplexes, office complexes and industrial parks in cities across the country. One more myth while Outsourcing to India: India is strong in services rather than manufacturing. This is much less true today than it was a couple of years ago. After incorporating new technologies, focusing on export markets and bagging hundreds of OEM contracts, India's manufacturers have scaled up and are now globally competitive in many areas, including autos and auto-parts, chemicals, pharmaceuticals and an array of engineering and capital goods. India's economy is no longer just an IT-services, back-office, outsourcing-driven story, as is widely perceived - though all that, too, still has a long way to run. Yet Outsourcing to India is good option for IT-services, software development, back-office operation, call center and other IT enabled services! IT Outsourcing
Babasabpatilfreepptmba.com
Page 70
“Contemporary Trends in Human Resource Acquisition” Outsourcing in broad terms is a transfer of some business functions or components of business processes to an outside contractor. To remain competitive, many companies outsource as a way to reduce costs, increase efficiencies, and refocus critical resources. Many organizations have their own IT departments catering to their software and other IT enabled services needs; while others go for IT Outsourcing. According to one estimate from IDC, total global outsourcing services spending are expected to reach US$151 billion by 2003. When it comes to IT Outsourcing, the U.S. market for IT Outsourcing will grow at a rate of 22% annually, reaching an unprecedented US$110 billion by 2003, according to market researcher INPUT. It is also forecasted that the Business Process Outsourcing (BPO) segment of total IT Outsourcing will lead the way, with a 29% annual growth rate, jumping from US$7.4 billion in 1998 to a projected US$26.5 billion in 2003. The Internet/intranet management portion of this will rocket 76% annually through 2003, largely due to e-business and e-commerce spending. Let’s see the basis attributes to this phenomenal success of IT Outsourcing. First, shifting of spending from Y2K fixes to other IT Outsourcing services supporting e-business/e-commerce. Second, revived interest in thin-client configurations, based on Internet appliances and e-commerce demands, and this is slowing the long-term trend toward distributed IT infrastructures. We understand that clashing trends always cost money. On the horizon, the impending, largescale adoption of Internet-enabled, wireless devices of all types will boost demand for networking upgrades, new ERP customization, and expanded desktop services outsourcing that includes this new technology and eventually IT Outsourcing. Because ‘Internet rates of speed' infect rates of technology change within the IT industry as a whole, clients are increasingly reluctant to undertake independent, in-house migrations to upgraded architectures and applications. IT Outsourcing (to be precise BPO outsourcing) is typically the catalyst driving corporate "reengineering" initiatives to streamline processes, reduce costs, and focus on business strengths. Other times, BPO is merely the "byproduct" of these re-engineering efforts. We know, although, banking, discrete manufacturing, and insurance have traditionally led U.S. IT Outsourcing, and the fastest-growing sectors in the next few years will be the telecom and utilities industries. Hence the future prospects for IT Outsourcing seem to be very bright in the coming years!
Babasabpatilfreepptmba.com
Page 71
“Contemporary Trends in Human Resource Acquisition” Outsourcing in broad terms is a transfer of some business functions or components of business processes to an outside contractor. To remain competitive, many companies outsource as a way to reduce costs, increase efficiencies, and refocus critical resources. Many organizations have their own IT departments catering to their software and other IT enabled services needs; while others go for IT Outsourcing. According to one estimate from IDC, total global outsourcing services spending are expected to reach US$151 billion by 2003. When it comes to IT Outsourcing, the U.S. market for IT Outsourcing will grow at a rate of 22% annually, reaching an unprecedented US$110 billion by 2003, according to market researcher INPUT. It is also forecasted that the Business Process Outsourcing (BPO) segment of total IT Outsourcing will lead the way, with a 29% annual growth rate, jumping from US$7.4 billion in 1998 to a projected US$26.5 billion in 2003. The Internet/intranet management portion of this will rocket 76% annually through 2003, largely due to e-business and e-commerce spending. Let’s see the basis attributes to this phenomenal success of IT Outsourcing. First, shifting of spending from Y2K fixes to other IT Outsourcing services supporting e-business/e-commerce. Second, revived interest in thin-client configurations, based on Internet appliances and e-commerce demands, and this is slowing the long-term trend toward distributed IT infrastructures. We understand that clashing trends always cost money. On the horizon, the impending, largescale adoption of Internet-enabled, wireless devices of all types will boost demand for networking upgrades, new ERP customization, and expanded desktop services outsourcing that includes this new technology and eventually IT Outsourcing. Because ‘Internet rates of speed' infect rates of technology change within the IT industry as a whole, clients are increasingly reluctant to undertake independent, in-house migrations to upgraded architectures and applications. IT Outsourcing (to be precise BPO outsourcing) is typically the catalyst driving corporate "reengineering" initiatives to streamline processes, reduce costs, and focus on business strengths. Other times, BPO is merely the "byproduct" of these re-engineering efforts. We know, although, banking, discrete manufacturing, and insurance have traditionally led U.S. IT Outsourcing, and the fastest-growing sectors in the next few years will be the telecom and utilities industries. Hence the future prospects for IT Outsourcing seem to be very bright in the coming years!
Babasabpatilfreepptmba.com
Page 72
“Contemporary Trends in Human Resource Acquisition” HR Outsourcing Company Let’s see how an HR Outsourcing Company can help you and your organization to reach the desired objectives. The true value of any company in any economy is its people, but there are still business owners who don't understand this economic reality. Ask yourself if your company could survive if tomorrow you lost all of your equipment, all of your machinery or all of your office supplies. Of course it could—because your people would pitch in to make sure it did. And that is possible with the help of an HR Outsourcing Company. On the other hand, could your company survive if tomorrow you lost all of your employees? However, you may not have the experience and expertise to become a human resources expert. With the increasing number of employmentrelated government regulations, HR Outsourcing Company has become a colossal task, demanding considerable resources. HR Outsourcing Company can help make your business more productive and profitable by turning your workforce challenges into competitive advantages. How you manage your people is every bit as important as how you manage any other business asset. Business successes and business failures have repeatedly shown us that there is a clear relationship between a company's people practices and its market value. Strong HR Outsourcing Company and its practices have the potential to increase your company's productivity and profitability, but you can't just toss a hodgepodge of HR strategies at your employees. You need to know which practices to focus on for your success yourself or using some good HR Outsourcing Company. PEO (Professional Employer Organization) or HR Outsourcing Company, not a staffing agency can provide HR outsourcing strategies to small and medium-sized businesses to maximize the value of your employees for increased productivity. HR Outsourcing Company services provide administrative relief by assuming and/or sharing many of your responsibilities as an employer, so that you can focus your energy on other business essentials. HR Outsourcing Company or Professional Employer Organization that provides comprehensive PEO services which provides help to: Increase Revenues using HR Outsourcing Company: Place the right people in the right jobs the right way. HR Outsourcing Company helps you find top performers who will fit in with your
Babasabpatilfreepptmba.com
Page 73
“Contemporary Trends in Human Resource Acquisition” company culture; assists you in managing employee performance; and helps you retain employees through training and development. Control Expenses using HR Outsourcing Company: HR Outsourcing Company services can help you control and stabilize your employer-related expenses. HR Outsourcing Company helps you retain your top performers by providing them with quality employee benefits. HR Outsourcing Company also lets you delegate much of your employment administration easy, so that you can focus on growing your productivity and profitability. Minimize Employer Risks using HR Outsourcing Company: When you decide to take advantage of HR Outsourcing Company, you can delegate many of your employer-related responsibilities to the Professional Employer Organization. HR Outsourcing Company services help with compliance issues and management of workplace liabilities. Why Outsource Why Outsource? What is outsourcing? What the benefits from outsourcing are? How to fetch-out the maximum out of outsourcing? These are some of the initial queries to anybody new to this concept. But even to those so called people with good knowledge in some particular field and wishing to seek specialized services in some other. Outsourcing and specially IT outsourcing has developed as a fairly acceptable business practice soon after it started. Initially outsourcing was considered a not so important business option as more and more emphasis was given to company’s own core competencies. Instead of outsourcing companies opted for in-house IT management. But to gain that additional management bandwidth some companies opted for IT outsourcing. Indeed these companies gained significantly from outsourcing different functions by associated themselves with real good outsourcing firm. Now you should remember choosing outsourcing partner should not be treated lightly, and less important than choosing your life partner, because of their importance in the success, for both of you. Outsourcing: Why and What Looking for ways to potentially cut costs and unburden your shrinking Human Resources staff members? Do you have staff working until six and seven at night? Are you going home each day feeling as if you will never catch up? If so, join the crowd - or choose not to join. Outsource instead.
Babasabpatilfreepptmba.com
Page 74
“Contemporary Trends in Human Resource Acquisition” "The current economic climate is forcing organizations to explore tactics to remain competitive. Business process outsourcing of certain functions is an increasingly popular way to improve basic services while allowing HR professionals time to play a more strategic role in their organizations." In a recent survey by the Society for Human Resource Management (SHRM), HR professionals were asked if they outsource any HR functions. Additionally, if they do outsource, they were asked what functions they outsource. According to The Outsourcing Institute, Survey of Current and Potential Outsourcing End-Users, the top ten reasons why companies outsource are: •
Reduce and control operating costs.
•
Improve company focus.
•
Gain access to world-class capabilities.
•
Free internal resources for other purposes.
•
Gain access to resources that are not available internally.
•
Accelerate reengineering benefits.
•
Handle functions that are difficult to manage or are out of control.
•
Make capital funds available.
•
Share risks.
•
Bring in a cash infusion.
Why Outsource your non-core administrative business processes, some of the major benefits include improved performance, increased profitability and shareholder value. Reasons: ·
you want to reduce operating expenses;
·
you want to keep your staff levels to a minimum;
·
an external service provider can do the work more cost efficiently than you can in-house;
·
you do not have expertise in this area;
·
you want to keep this function confidential;
·
you have uneven workloads throughout the year and want a variable cost structure;
Babasabpatilfreepptmba.com
Page 75
“Contemporary Trends in Human Resource Acquisition” ·
you operate in a shift work situation;
·
you are expanding rapidly but the growth may not be permanent;
·
you want to free up your management time and concentrate on your core competencies.
“Reason for Outsourcing” chart 26 percent – Save money 23 percent – Focus on strategy 22 percent – Improve compliance 18 percent – Improve accuracy 18 percent – Lack experience in house 18 percent – Take advantage of technological advances 17 percent – Offer services we otherwise could not 15 percent – Focus on core business 5 percent – Other 47 percent – Do not outsource Functions Outsourced 84 percent - 401 (k) administration 84 percent – Employee assistance/counseling 74 percent – Retirement planning help 73 percent – Pension administration 72 percent – Temporary staffing 68 percent – Background checks 57 percent – Training and management development programs 54 percent – Executive development and coaching 53 percent – Health care benefits administration 49 percent – Employee benefit administration 49 percent – Payroll 46 percent – Risk management 44 percent – Executive staffing 41 percent – Employee relocation 40 percent – HRIS selection, training implementation
Babasabpatilfreepptmba.com
Page 76
“Contemporary Trends in Human Resource Acquisition” 32 percent – Recruitment 17 percent – Executive compensation and incentive plans 15 percent – Policy writing 14 percent – Administration of compensation/incentive plans 11 percent - Wage and salary administration" Take a look at what other organizations are outsourcing. Outsourcing certain business processes might make sense for you, too. In any case, thinking about it just makes good business sense from a strategic perspective. The Reasons for Outsourcing survey was fielded during the week of July 22-29, 2003, and was based on the responses of 393 randomly selected human resource professionals. The margin of error is +/- 4.9 percent. The Functions Outsourced survey was fielded during the week of July 29-August 5, 2003, and was based on the responses to outsourcing questions of 360 randomly selected human resource professionals. The margin of error is +/- 5.15 percent.
Outsourcing Advantages and Disadvantages Many businesses choose an outsourcing partner or service provider on instincts, without initially matching their needs with the partner's capabilities. The two most important Outsourcing Advantages and Disadvantages factors in a successful outsourcing relationship are trust and security - without these the relationship is destined for failure. It is therefore important that you take the time and effort required to find the perfect partner. Firstly, acquire a list of potential partners before judging the potential Outsourcing Advantages and Disadvantages. You should then find out if their service can cater for your needs. Speak to an employee of the service provider, as their service may extend from what it initially suggests on their web site or information supplements - there could also be hidden terms and conditions that may affect your decision and ultimately Outsourcing Advantages and Disadvantages. Find out who their current/past clients (if at all) are so that you can obtain references on their service quality. Finally - and arguably most importantly - ensure that the service provider has long-term financial stability. Obtain a company report or bank reference to solidify your perception.
Babasabpatilfreepptmba.com
Page 77
“Contemporary Trends in Human Resource Acquisition” With this is in mind let’s prepare a small listing of the general Outsourcing Advantages and Disadvantages: Advantages of Outsourcing: ·
Allows a business to focus on core activities
·
Streamlines a business' operations
·
Gives you access to professional capabilities
·
Shares the risk
·
Piece of mind that the process is in good hands (reliability)
·
Do not have to worry about continually introducing new technologies
·
Improves service quality
·
Frees up human resources
·
Frees up cash flow
·
Increases the control of your business
·
Makes the business more flexible to change (i.e. demand)
Disadvantages of Outsourcing: The fear of the service provider ceasing to trade (bankruptcy, etc) You may lose control of the process Creates potential redundancies Other companies may also be using the service provider. Therefore in some cases, the best interests of the service provider may be diluted with other users You may lose focus of the customer and concentrate on the product (the outsourced process) The loss of talent generated internally Employees may react badly to outsourcing and consequently their quality of work may suffer
Babasabpatilfreepptmba.com
Page 78
“Contemporary Trends in Human Resource Acquisition” Outsourcing Problems Outsourcing is frequently considered a panacea - a vendor promises that because of their experience, knowledge base, proprietary tools and systems, leverage with suppliers, etc., they can do what you do better and for less money. Unfortunately, it rarely seems to work out as well as it should. But sometimes it may face Outsourcing Problems. Because any function can be a candidate for Outsourcing Problems, provided it is not critical to what makes your company competitive in its environment. For example, IT is generally the poster child for Outsourcing Problems because it started that way - companies outsourced their data processing to large timeshare mainframes. These days many other aspects of IT are also subject to significant economies of scale - both in terms of operation and purchasing. Also, IT is something of a black box to the rest of the organization - therefore, if they don't understand how it works or why it's strategically important, it must be a commodity that someone else could also do, and hence can pose Outsourcing Problems. Thankfully, outsourcing is not limited to IT only. HR can be outsourced, as can something like claims administration for an insurance company. Even product development can be outsourced to one of the many engineering design firms that perform that function. There are marketing firms/advertising agencies that are basically outsourced marketing departments for the companies they represent. There are even some companies that use an outside law firm as their outsourced general counsel's office. It all depends on what you do, what you need, and what you're good at, to save yourself from any Outsourcing Problems. We are discussing here some of the common, fundamental Outsourcing Problems and relationships, regardless of the industry or function being outsourced, and to suggest ways of structuring the relationship to increase the likelihood that it will be successful. Let’s see salespeople and executives Outsourcing Problems, salespeople are good at selling. They tell executives what the executives want to hear in order for the executives to want to buy the product that is being sold. Executives like to do big, sexy projects. An outsourcing is a dramatic way to look like you are doing something. The executive is bringing in an Expert who is "Best in Class" to provide a service better and cheaper than the executive's company can do it for itself. Who could say no? one of the biggest Outsourcing Problems come from the fact that the vendor's sales people don't necessarily understand your problems - they just know that given enough time and money, their people are likely to be able to do what your company needs well enough that you won't throw them out. The executive, always under pressure to do more with less, listens to the
Babasabpatilfreepptmba.com
Page 79
“Contemporary Trends in Human Resource Acquisition� salesperson's promises, but probably doesn't necessarily understand the intricacies of the functions that the vendor is proposing to take over. Outsourcing Problems arises out of philosophical differences, the second big problem with outsourcing deals, and the reason why so many of them fail (or are at least unsatisfying), is lack of communication and lack of work up front to design the relationship. Customers and vendors approach outsourcing with two radically different philosophies, but they rarely discuss those philosophies and the impact that they will have on the relationship. The customer expects the outsourcer to act exactly like the customer's own people acted. So if the customer asks the outsourcer to do some extra work, the customer expects that the outsourcer will just prioritize the work or stay a little late and get it done at no additional cost. And this may lead to some of the initial Outsourcing Problems. HR Outsourcing and Its Benefits: The Role of Contingencies Although performance related outcomes such as reduced costs and better access to specialized expertise are frequently cited as advantages gained from HR outsourcing, there is likely to be much variation in the degree to which firms actually benefit from outsourcing. Transaction cost economics (TCE) argues that firms will differ in their capacity to benefit from how market-based structures can reduce transaction costs . Furthermore, social exchange theory argues that the benefits received from a contractual exchange will likely be influenced by the quality and level of trust that develops in the relationship . Given that HR outsourcing has important consequences for the quality and cost of HR as well as the profession , it is important to understand why firms may differ in the benefits received from this increasingly important practice. Because TCE and social exchange theory can be useful in assessing how contextual factors may influence the ability of a firm to capitalize on HR outsourcing benefits, we use these perspectives to identity characteristics related to the firm, the vendor relationship, and the firm’s competitive environment that may influence the effectiveness of using HR outsourcing.
Organization Size Although the growth in HR outsourcing is broad based, there are differences in reliance on outsourcing with respect to organization size with research indicating that larger organizations
Babasabpatilfreepptmba.com
Page 80
“Contemporary Trends in Human Resource Acquisition” rely more heavily on outside vendors than smaller organizations. For example, one study (Klaas et al., 1999) reported that employers with more than 250 employees use HR outsourcing at a rate almost four times greater than employees with less than 100 employees, with the highest rate of overall HR outsourcing conducted by firms with more than 500 employees. And in contrast to small employers who report limited use of outsourcing (Hirschman, 2000), surveys that restrict the sample to large employers have found that over 90% of firms rely on some form of HR outsourcing (Greer et al., 1999). Although larger firms report greater overall reliance on HR outsourcing, smaller firms may have special incentives to outsource because of limited inhouse capabilities and advantages of economies of scale that can be achieved from outsourcing . In small firms many HR activities will be infrequently performed. Because of the high cost of conducting these activities in-house, the per unit cost of conducting these services will be relatively high. By contrast, in larger firms the per unit cost for in-house HR will be substantially lower due to greater economies of scale. Given that the cost of in-house delivery of HR is likely to be greater for small firms, one would expect that smaller firms—compared to larger firms— would have a greater propensity to outsource. The fact that the opposite is true is perhaps explained by a countervailing effect. Outsourcing is an emerging practice within organizations and it may be that decision makers within large firms are simply more familiar with emerging business practices and how they might be used to benefit the firm. However, there are strong incentives for such firms to use HR outsourcing and we predict that—particularly with the emergence of the PEO industry—the trend toward outsourcing will continue to grow in the small business sector. Firm Specific Programs Where firms use a distinctive approach to managing its workforce, HR processes cannot be codified and often are based on tacit knowledge. As a result, it is less likely that a contractor can provide satisfactory services unless programs are designed that capture the particular needs of the firm. Designing customized programs that are closely tied to the organization’s unique culture will, however, likely require substantial up-front investment in understanding the particular needs of the firm. Due to this up-front investment, designing such programs require additional resources that may reduce the cost advantages associated with the economies of scale that are gained by servicing multiple clients with similar needs .
Babasabpatilfreepptmba.com
Page 81
“Contemporary Trends in Human Resource Acquisition” In addition to cost issues, the need for customized programs increases the risk associated with outsourcing. Because programs are tailored to meet the unique needs of the firm, the potential dependency created by outsourcing can be problematic because vendor switching will be difficult and costly. The reduction in economies of scale advantages and the increased risk of dependency on vendors suggests that firms will likely benefit less and, in turn, should exercise caution when outsourcing idiosyncratic practices that require specific program development . Although relying on unique practices may change the advantages associated with outsourcing, the impact of firm-specific and idiosyncratic practices may depend on the type of HR activity outsourced. For example, because transactional activities such as payroll are standard across organizations and industries, buyers and sellers of these services incur few up-front costs and have minimal dependence on one another. In contrast, design/strategist activities as well as some provider activities must be tailored to the firm’s unique needs, requiring greater upfront investment and leading to greater relative dependence. Consistent with a TCE perspective, there is some evidence suggesting that firms are more averse to outsourcing unique and idiosyncratic HR activities. For example, one study that examined outsourcing at twenty-five companies found executives were unanimous in their advice not to outsource core competencies such as labor relations, employee relations, and performance management functions (Greer et al., 1999). It also appears that firms using idiosyncratic practices are less likely to outsource HR generalist and training activities, but not routine administrative activities and staffing activities. In addition, firms have also reported that using idiosyncratic practices moderate the relationship between outsourcing usage level and satisfaction with outsourcing. Consideration should be given both to the risks identified by transaction cost economics and to whether characteristics of the vendor-client relationship might mitigate these risks. In short, consistent with a TCE framework and research findings, firms should be reluctant to rely heavily on outsourcing for activities that meet specific needs, especially for idiosyncratic HR practices that are closely connected to the firm’s culture. Previous HR Performance Internal HR management facilitates the development of firm-specific human capital and tacit knowledge and, over time, the leadership and direction by managers possessing tacit knowledge results in this knowledge being internalized by subordinates. Conversely, as discussed earlier, HR
Babasabpatilfreepptmba.com
Page 82
“Contemporary Trends in Human Resource Acquisition� outsourcing may limit the opportunities of employees to develop broad competencies that are needed to function effectively. With HR outsourcing, while objectives can be contractually specified, it will be difficult to transfer such tacit knowledge to vendors if they are based on tacit knowledge, raising concerns about the ability of vendors to achieve optimal performance. However, where the internal staff has failed to develop the routine and resources necessary to achieve high performance, outsourcing represents an alternative means by which to obtain the expertise necessary to improve levels of performance. While doing so may result in the firm being exposed to opportunism by the vendor, such exposures may be less costly than continued substandard performance. Promotion Practice History Emphasizing internal promotion creates paths and training for career advancement and firms that provide such opportunities are able to reward sustained contributions by employees. Internal promotion can alter the cost and benefits of HR outsourcing in several respects. First, using the internal labor market facilitates the accumulation of greater tacit knowledge, knowledge that can important for HR functions, especially with respect to activities that cannot be easily standardized. Second, one incentive of outsourcing is to avoid the costs that may be incurred by employees pursuing subunit goals at the expense of firm goals. Such costs, however, can be limited by control devices , and using promotions as a reward can be one type of control device. Because outsourcing may deprive the firm of tacit knowledge and an important reward system, there will likely be fewer benefits associated with HR outsourcing when the firm has a tradition of emphasizing internal promotion. Demand Uncertainty In addition to internal characteristics, factors related to the firm’s external environment may also influence the benefits generated from market based HR management. One external factor that may impact the feasibility of HR outsourcing decision concerns the demand uncertainty faced by the firm (Williamson, 1996). When tasks are performed in-house, it may be more difficult to reallocate activities across employees in response to demand shifts. While internal staffing involves investments in human capital, making adjustments to demand changes may require forfeiting these investments, resulting in greater cost to the firm. Given that vendors can reallocate work across their client base in response to demand shifts , relying on outsourcing may
Babasabpatilfreepptmba.com
Page 83
“Contemporary Trends in Human Resource Acquisition� be more attractive to firms that compete in less certain environments. Because they will likely benefit most from increased flexibility, consistent with a TCE perspective, firms facing greater demand uncertainty are more likely to benefit from outsourcing . Cost Pressures The pressure to reduce cost represents another external factor that may influence the incentives and benefits of outsourcing. One frequently cited reason for outsourcing is to achieve cost savings. However, given that firms face different cost pressures, it is likely that organizations will vary in the value of the cost savings achieved from outsourcing. In firms that confront strong cost pressures, the benefit achieved from cost reductions will more likely offset the potential downside from outsourcing, relative to firms that confront less cost competitive situations. As a result, firms competing in a context of high cost competitiveness may place greater value on the cost savings available from HR outsourcing. Pay Level Because firms vary in their pay level policies, the cost of providing in-house HR varies among organizations. For organizations that use a pay lead policy, in-house HR is likely to be more costly, thus increasing the attractiveness of outsourcing as a cost reduction strategy. Although firms that follow a pay lead policy may be able to attract and retain high quality employees, the higher costs associated with pay leadership should increase the benefits of HR outsourcing . Trust and Vendor-Client Relations Social exchange theory emphasizes the role of trust in contractual relationships. Consistent with a contingency approach, the ability of the firm to identify and select vendors with whom a trusting relationship can develop will likely influence the benefits achieved with outsourcing. Again, however, the importance of trust will likely vary with the type of activity outsourced. While contractual specifications will probably provide for sufficient vendor accountability when outsourcing routine administrative functions, trust will be essential to achieve optimal results when outsourcing designer/strategist functions that involve firm-specific practices. When outsourcing designer/strategist activities, it is likely that firms who are able to select vendors with
Babasabpatilfreepptmba.com
Page 84
“Contemporary Trends in Human Resource Acquisition” whom they can develop trust and who understands how to initiate and nurture a trusting relationship will benefit more from outsourcing. In summary, not all firms are alike when it comes to HR outsourcing. Characteristics unique to the firm and the competitive environment present a host of contingencies that may increase or decrease the benefits received from outsourcing. As such, variation in the type and degree to which a firm uses HR outsourcing will likely vary in accordance with the firm’s unique characteristics and its competitive environment. Outsourcing HR Administration HR BPO firms potentially can develop a value proposition that is superior to the one that internal providers of HR services can offer. Although keeping HR administration in-house eliminates the need to pay for the overhead and profit of an HR BPO firm, it may not end up being less expensive. It sacrifices the economies of scale that are available with an HR BPO firm and generates its own overhead inside the organization. Thus, it is likely that in most cases, HR BPO firms can develop economies of scale that result in cost savings beyond what a company can develop on its own. They also have a superior opportunity to develop domain expertise. They are in a position to aggregate world-class HR process experts and worldclass HR software solution experts. Because HR is their core competency, they are likely to be more efficient and improve HR processes and practices at a more rapid rate than is the internal function of an organization. The success of HR BPOs with their early adopters suggests that the advantages of an HR BPO relationship are not just wishful thinking. They can, in fact, be a reality if organizations can avoid the problems that may occur with outsourcing. Potential Outsourcing Problems The literature on outsourcing has identified a number of key problems with outsourcing.
[3]
Most
of this literature has looked at IT outsourcing rather than specifically at HR BPO outsourcing, but it still is informative about the potential problems that organizations should be aware of before they enter into outsourcing relationships. Wrong Vendor.
Babasabpatilfreepptmba.com
Page 85
“Contemporary Trends in Human Resource Acquisition� Many of the outsourcing failures by corporations can be traced to their picking the wrong vendor or vendors. Nothing is more fundamental to the success of an outsourcing effort than the fit between an organization and its vendor. The vendor needs to have the right systems and a working style that fits with the company it is serving. In the HR space, a number of HR vendor firms have been sold or have failed, and this is likely to continue to happen as the industry matures. Vendor stability and continuity are critical to the longterm success of an HR BPO contract. Changing vendors can lead to a major disruption in the services that an organization receives, and thus a key issue in outsourcing is the financial stability and long-term future of the vendor. Poor Contract. Developing a good contract is critical to HR BPO outsourcing. Entering into contracts that are poorly structured can quickly lead to failure. HR BPO contracts can be too favorable to one party, lack good standards and performance expectations, and be overly rigid. With advances in technology and changes in organization size and business strategy, contract flexibility is critical. In contracts as large and complicated as those in HR BPO, many issues will remain vague and depend on trust. Thus, it is particularly important that contracts be clear about expectations, roles, and dispute resolution. Poor Change Management. Outsourcing a major function of a corporation raises critical change management issues. The process of change is almost as critical as the change itself. Inevitably, changes create chaos that need to be managed. There typically is a substantial dislocation of people, as well as a need to develop new expertise and transfer a considerable amount of knowledge. When this is handled poorly, an outsourcing effort can produce major problems: critical expertise can be lost, poor transfer of systems and therefore poor service levels can appear, and ultimately, an organization may have to take its outsourced activities back in-house or find a new vendor in order to solve the problems. A particularly important feature of the change process concerns how the existing employees are dealt with. Outsourcing has a major effect on the employees in HR and a significant effect on all other employees. A major communication and training effort is needed to explain what is happening and why and to familiarize employees with the new process. If staffing in HR is being
Babasabpatilfreepptmba.com
Page 86
“Contemporary Trends in Human Resource Acquisition� reduced, a separation program is needed that includes extensive communication about what is happening and fair treatment of terminated employees. No Exit Strategy. Organizations that outsource can become overly dependent on the supplier.
[4]
That is, they can
lose their internal expertise to such a degree that they have little ability to monitor the supplier, choose a new supplier, and move their activity to a new supplier. Organizations always need to keep in mind an exit strategy from their existing HR BPO vendor and maintain a sufficient level of expertise to be able to execute the separation from their existing vendor.
Babasabpatilfreepptmba.com
Page 87
“Contemporary Trends in Human Resource Acquisition” Suggestions to Carnegie Consultancy Firm •
Carnegie Consulting can extend different sort of services to the companies by taking up Initial screening, preliminary interview to fit the right candidates into right positions.
•
Carnegie Consulting can take up new requirements for new technology.
•
One major suggestion to the Carnegie Consulting is to design a Carnegie official website, for online registration to generate more CV's.
•
Carnegie should develop the attractive infrastructure in order to attract more companies.
•
Employees should be motivated by rewards, Incentives to increase the moral.,
•
Carnegie should clearly defined job profile of each employee & reporting system.
•
Carnegie can expand its services to different cities like Mumbai, Chennai etc.
•
Carnegie can explore new markets such as non-IT.
Babasabpatilfreepptmba.com
Page 88
“Contemporary Trends in Human Resource Acquisition” Bibliography Books 1. HRM by Gary Desler 2. HRM by Gomez Website 1.www.saic.universityelearningskillportal.com 2.www.hrfolks.com 3.www.bangaloreit.com 4. Related Links: •
Ministry of Information Technology
•
National Association of Software & Services company
•
Software Technology Parks of India
•
India to be the fastest growing IT market in 2001 - CNET, September 11, 2000
Babasabpatilfreepptmba.com
Page 89
“Contemporary Trends in Human Resource Acquisition”
Babasabpatilfreepptmba.com
Page 90