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Increasing Profitability through Offshore Sourcing and Recruiting And Not Getting Burned

(March 11, 2009)  
The Allure and the Challenge
Corporate recruiting departments have been working with staffing agencies since the first employment agency in the United States, Engineering Agency, was founded in 1893. Although working with staffing agencies is expensive, until recently there have been few other ways for companies to supplement their internal recruiting capabilities.

A single corporate recruiter may handle up to 60 simultaneous job openings. It simply is not possible to conduct quality searches for this many positions. Many corporate recruiters also have human resources responsibilities, which make it even more difficult to find the time to recruit for so many openings. Therefore, companies turn to staffing agencies to ensure critical openings get filled.

In the last three or four years, progressive companies have discovered a better alternative. Working with an offshore recruiting partner can increase recruiting productivity by 30 to 50 percent while lowering staffing agency costs by up to 80 percent.

Sound too good to be true? While these types of results are certainly possible, they are not always achieved. The quality of many offshore recruiting firms is inconsistent and some firms are less than totally reputable. So selecting the right partner is critical.

The Concept

Many of the tasks involved with recruiting mid to fairly senior ($50,000 to $130,000) information technology, finance, and accounting professionals are not done face-to-face. Recruiters often identify candidates through Internet-based sourcing and then communicate with the candidate using the phone and e-mail. These "back-office" activities can be performed equally effectively from a lower cost center - offshore. The majority of offshore recruiting firms are located in India, but some offshore recruiting firms can be found in other Asian, Eastern European, and Latin American countries.

Offshore Recruiting Services

Offshore recruiting firms provide a range of services. Full lifecycle recruiting allows corporate recruiting departments to outsource recruiting functions that do not require in-person interactions. Tasks can include sourcing, candidate interviewing and qualification, negotiating pay rates, administering online tests, and conducting background and reference checks.

Internet-based sourcing and/or candidate screening services are simpler than full lifecycle recruiting, yet can free up to 50 percent of corporate recruiters' time. The offshore sourcers and recruiters work as "assistants" to the corporate recruiters and typically provide support for the most critical and time sensitive job openings. The offshore team performs the time-consuming tasks and leaves the highest-value, highest-touch tasks to the corporate in-house recruiters. As a result, corporate recruiters can close up to 50 percent more job openings, focus on complex tasks requiring the greatest skill, provide a more positive experience for candidates, and delight their hiring managers through presenting higher quality candidates.

What to Look for in an Offshore Recruiting Partnerr

Selecting an offshore recruiting partner can be confusing. The "sales pitches" of many firms sound suspiciously similar. Oftentimes, these "me too" firms end up competing almost solely on price. This can be dangerous because at a certain price point, it becomes impossible to provide quality sourcing and recruiting services without significantly cutting corners or worse.

Recruiting is not a commodity business. It would be foolish to hire an internal recruiter based solely on the cost of the recruiter and with no regard to the recruiter's capabilities and experience. The same is true when hiring an offshore recruiting firm.

The checklist below outlines thing to look for when selecting an offshore recruiting firm. With careful due diligence in selecting a partner, the promise of offshore recruiting is likely to be realized.

Challenge - Recruiters who are not trained

Solution - Offshore recruiting firms work on low margins and some cannot afford to hire experience recruiters or provide training. Insist on the offshore firm providing bios of the recruiters on your offshore team. Verify that the recruiters have received training and be skeptical of firms that claim to provide on the job training.

Challenge - Recruiters who do not speak clearly

Solution - Insist on speaking with the recruiters on your offshore team. Verify that the recruiters have received voice and accent neutralization training.

Challenge - Recruiters who do not understand the nuances of American business

Solution - Some offshore recruiters will not understand the urgency of American business or the importance of delivering on commitments. Some will be hesitant to say "no" or "I do not understand" to an American client. Verify that the recruiters on your offshore team have experience working with Americans and training in American business practices.

Challenge - Recruiter turnover

Solution - Turnover of recruiters in India is extremely high and can undermine performance. High turnover is mostly caused by the enormous demand for experienced international recruiters. Other reasons include health problems from working the nightshift, proposals for arranged marriages that stipulate no nightshift jobs, and leaving a job to take care of an ailing family member - even when the ailment is not life threatening. The level of turnover is much lower in offshore firms that offer their recruiters higher pay and better opportunities to learn and advance professionally. Ask your offshore firm about their recruiter attrition rates and retention programs.

Challenge - Lack of processes

Solution - The offshore firm should have well-established work processes and procedures to monitor the progress of each job opening. Ask detailed questions about the work process and make sure there is experienced management overseeing the recruiting team.

Challenge - Poor Infrastructure

Solution - Effective offshore recruiting is not possible without quality infrastructure for both voice and data. Talk with your offshore team to confirm voice quality is acceptable and check to make sure the offshore firm has redundant ISPs in case of an outage.

Challenge - Disreputable companies

Solution - Some offshore recruiting firms, especially those competing on price, will cut corners. Some common dishonest practices include billing "dedicated" recruiters to more than one account, not fully staffing teams that are supposed to have multiple recruiters, not providing backup recruiters when recruiters are absent, and submitting candidates to multiple clients (be especially leery if the offshore firm has its own US staffing agency). Make sure that your agreement is with a US firm in case there is a need to enforce disputes.

Challenge - Contract Terms

Solution - Some firms insist on long-term contracts that provide little recourse if performance is not acceptable. Look for firms with flexible contract terms.

About iPlace
iPlace is a global recruiting company with headquarters in Vienna, Virginia, USA and international recruiting center in Pune, Maharashtra, India. We provide professionally managed sourcing and recruiting services for American companies from our facility in Pune. iPlace specializes in information technology, engineering, healthcare, and finance and accounting positions.

iPlace has implemented the best attributes of Indian and American sourcing and recruiting processes to ensure consistent high quality, speed, and professionalism. Key elements of our approach include:

" iPlace's recruiters and sourcer are dependable, have excellent communication skills, and are well-trained. We attract and retain the most capable senior recruiters and sourcers with international recruiting experience through higher pay and better opportunities to learn and advance professionally. New recruiters and sourcers who do not have international recruiting experience attend iPlace Academy, our eight-week intensive training program, before being assigned to a client account. All employees are certified every three months.

" iPlace identifies candidates from our recruiters' and sourcers' personal networks, job boards, web crawlers, free job portals, search engines, social networking tools, local organizations' websites, discussion groups and chat rooms, blogs, third-party suppliers that provide corp-to-corp consultants, university alumni sites, our clients' databases (when made available to us), and iPlace's proprietary database. We find the candidates that are the best fits because we "fish from more ponds."

" We provide round the clock recruiting. Our sourcing team identifies candidates during the US night so that our clients' recruiters have candidate's resumes when they come into work in the morning. Our recruiters qualify candidates and collaborate with our clients' recruiters during the US day.

" iPlace's recruiting services are customized to address the differing recruiting needs of each client. Our clients may select the most appropriate of three distinct offshore recruiting services (sourcing, preliminary qualification recruiting, and full lifecycle recruiting).

About Hank Levine
Prior to founding iPlace, Hank Levine launched and headed one of the largest Indian-based recruiting firms servicing the US staffing industry. Over the past five years, he has helped 70 American companies establish offshore recruiting operations. He holds his MBA from the Sloan School at MIT and bachelor's in engineering from the University of Pennsylvania.

Hank Levine
President and CEO


Colleen Gildea

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