Why Small Businesses Are Outsourcing Their Human Resources

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Traditionally, outsourced talent and management services have been the domain of larger enterprises and corporate entities. Among smaller and medium-sized companies, hiring and managing a workforce generally falls to the business owner, or for a medium-sized company it may be taken on by each departmental head or perhaps a second in command.

Recent developments are changing the playing field however, with a much wider array of services appealing to organisations of all kinds, shapes and sizes. Digital delivery means that a large proportion of solutions can be administered remotely and accessed quickly and easily by one end-user such as the business owner or general manager, and also allows solutions to be scaled easily to suit the size and style of the business and cater for rapid growth (or, dare we mention it, reduction).

Recruitment Process Outsourcing (RPO) stands as the driving force behind this change, continuing the push by many small and mid-sized companies towards using more business process outsourcing (BPO) services. RPO is basically the transfer of all or part of a facility’s recruitment processes to an external service provider, in the same way that Software-as-a-Service (SaaS) has become a standard practise. A company offering RPO solutions may either adopt the staff and methodologies of the client company, or bring their own staff, technology, methodologies and reporting.
Ultimately, RPO providers assume ownership of the design and management of the recruitment process and the responsibility of results for the company or organisation they represent.

One aspect of RPO that is of particular use to SMBs in Australia is the expertise and flexibility they can provide. A mix of permanent and contingent workers is becoming more common in Australia, with Ardent Partners predicting that 45 per cent of the total corporate workforce will be considered non-employee, contingent or contract-based by 2017.

Contingent workforces help smaller organisations scale and flex by providing additional capacity exactly when it’s needed. Managing such a flexible workforce can seem threateningly complex, but that is where a solution provider comes in. This form of management is often useful when a business requires the attraction, engagement and management of a specific type of skilled workforce; technologists, change & transformation professionals, finance or sales and marketing personnel for example. Being able to call on a contingent workforce is crucial, as it provides the staffing needed to deliver on key projects, or respond to seasonal demands. Relying on the services of an RPO provider allows the company to gain the workforce they need without the attendant hassles of advertising, interviewing, selecting and hiring a workforce, only to have it dismissed again shortly afterwards when the project or event has passed.

Flexible solutions can be scaled up or down to meet the needs of fast-growing organisations as well, with some service providers catering for a pay-by-the-employee approach. A turn-key solution allows smaller and medium-sized businesses to deploy a fast, scalable service at a fixed price, digitally administered from one central location. Since the structure and price are pre-determined there are no nasty surprises, and therefore no issues with visibility or accountability. In essence, a facility in Australia can now access the same level of resources as an enterprise-level corporation.

Larger facilities have been using RPO services for years, but the nature of the service has evolved lately, responding to the rise of digital platforms among large and small corporations. A service such as RPO Accelerate takes ownership of the entire talent acquisition lifecycle on behalf of a client and delivers the service from a standardised platform in one central location. The service will be driven by a dedicated virtual team, and underpinned by technologies such as PeopleFluent’s recruitment management system, Broadbean’s vacancy posting and database searching tools, and ServiceNow’s user support capabilities.

Technology is leading the way for SMBs in Australia, in all facets of running a business. Recruitment and management companies simply had to respond in order to stay relevant, and it also gives us the opportunity to extend services to new areas of the marketplace here in Australia.

So, what is involved in moving to an RPO model of recruiting? There is quite a lot more than simply changing the operations of a SMB’s hiring functions. There will be a significant rearrangement of the complete recruitment and resourcing lifecycle, which will deliver significant benefits over the traditional managed services offered by recruitment companies. The most obvious of these is the creation of a seamless link between the on-boarding of permanent and contingency staff, as well as redeployment, mobility and outplacement.
Smaller enterprise in Australia can benefit from RPO in many ways. With strong demand for skilled staff continuing to rise in many sectors, it might be time to have a fresh look at the recruitment options available.

Caleb Baker is the Managing Director, APAC & Emerging Markets, Alexander Mann Solutions

Caleb Baker is the Managing Director, APAC & Emerging Markets, Alexander Mann Solutions