The Hindu Business Line : HR, no longer a back-end activity

IN THE growing global economy, the human resource function is becoming increasingly complex. For an outsourcing solution to help companies cut costs and manage the human resource, needed is a partner who understands ways to add value.

Existing models of instructional design and performance improvement offer promise for enhancement in nearly every area of human resource development. However, they fall short of the potential to address human motivation in ways that enable workplace performers and their organisations to thrive. This article reviews dominant models for instructional design and human performance technology now in use, and compares their treatment in the light of recent research in human motivation.

The estimated value of human resource outsourcing is reportedly $78 billion globally and India has few players to exploit the opportunity. Experts feel India stands to benefit as a cost-effective contender in this segment. All three elements of the cost, labour, technology and CRM (customer relationship management) are advantageous to the country.

Today, HR is no longer a back-end activity. It is becoming imperative that smart manpower planning is perfectly aligned to a company's overall business objectives. Today, HR managers are as much on the street as business managers. As a consultant to, and partner in, the company, the role of the top HR managers has morphed from traditional body shoppers to pride-builders — beyond the mere managing of attrition or retaining of talent. In an intellectual capital-driven knowledge economy such as India, where people have unlimited access to information, the only differentiator between a successful and an unsuccessful company is how each manages its people. Large companies have been on a recruiting spree and 2005 is likely to see solid sales and profit growth from these companies, even as smaller firms are trying hard to maintain and improve their immediate profitability levels.

Salary levels have played a role in this. Even as entry-level salaries dropped 12 per cent (Rs 2.6 lakh average), average salaries are up 19 per cent (Rs 5.7 lakh). Also,

Senior executive salaries are up 26 per cent (Rs 12.4 lakh average, above 10 years experience);

Overall, hikes are higher than last year (average hike 17 per cent);

Perks and benefits have been extended to a larger employee base; and

Variable/performance-linked compensation have gone up.

Yet, salaries have not been such a great motivator. According to the Best Employers' Survey 2004, salary and compensation were ranked butthe fifth reason for taking a job and only 8 per cent of the respondents attributed that to be the basic reason for joining a company.

The same stood at 10 per cent in 2003, indicating "show me the money," is a lure of the past. The technology has changed the way HR is conducted just as it has changed the ways of businesses.

Online recruiting

Technology, particularly the Web, has reinvented the way companies hire people. It helps corporates find out the talent out there and enables them distribute (résumés and job postings) quickly, across the globe. Resumes submitted through a Web site are immediately available to recruiters for screening and processing.

Specialisation

Core competency is developing and leading firms actively capitalise on this expertise, resulting in:

Up-to-date mastery of sophisticated Internet search techniques, as well as traditional and `grassroots' sourcing methods;

Insights into industry developments and current salary trends;

Streamlined internal processes;

Powerful resume collection, sorting, tracking, and search capabilities; and

A robust community of "job-ready"; and

Immediately available talent to serve client needs.

This powerful combination of factors results in the identification of excellent candidates — even those that are seemingly elusive (or `passive') — swiftly and efficiently.

Cost savings

Outsourcing eliminates the fixed expense of the recruitment and selection infrastructure, a benefit that is particularly appealing if talent requirements are variable.

It is no longer necessary to train and compensate in-house recruiters and support staff and, more important, to deploy and maintain the requisite technology. The latter is especially advantageous considering how quickly systems and software become obsolete.

Candidate cycle-time and cost per hire are also reduced by virtue of the vendor's understanding of what works and what does not. While, perhaps, less dramatic than the expenses cited above, these costs also have a significant impact on an organisation's bottomline.

Redirected HR focus

Finding the `right' talent, while critical, is only one small item on the sizable HR "to do" list. As a firm's success hinges upon its ability to hold onto these stars and help them flourish, retention and development activities cannot be relegated to the back-burner. It is important to note that recruitment outsourcing is not necessarily an "all or nothing" venture.

While a skilled full-service talent provider can certainly administer the entire recruitment function — from performing departmental needs assessments to orienting new hires and temporary workers to the organisation — a variety of options is available, including:

Keeping the direct-hire process in-house while turning over the `ownership' of contingent workforce to a staffing partner;

Submitting temporary, temporary-to-hire, and direct hire requests to the vendor only on an "as needed" basis (that is, when internal staff is overloaded or their efforts have been unsuccessful); and/or

Utilising a talent provider to expand, support, or completely manage outreach programmes such as college recruiting, job fairs, etc.

The importance of the staffing function cannot be overstated. A company's performance, after all, can only be as strong as that of the people who work for it.

Equally vital, however, are performance management, leadership development, succession planning, and a host of other strategic HR initiatives.

To remain competitive, companies need to start planning now for the quantitative and qualitative workforce changes with which they are likely to be faced. Clearly, recruitment, retention, and training will be critical.

However, a `holistic' approach to talent will reap the greatest rewards and return.

(The author is Senior Manager, Business Development, Techpoint Solutions India Pvt. Ltd., Hyderabad.)

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