Chairman's message: Savings. Systems. Service.

R.W. Pollock

This post is written by Drake International's Chairman, Bill Pollock, and is reprinted with permission from the most recent edition of the Drake Business Review.  This post serves at the Chairman's Message - thanks to Bill for sharing it with us!

The Attraction of HR Outsourcing

In 1999, multinational oil and gas conglomerate British Petroleum made the epic decision to outsource almost all of its HR processes. Thus began the human resources outsourcing revolution. Over a decade later, the HR process outsourcing revolution had grown swiftly, adopted not just by large companies but also by mid-sized operations.

In Joshua Cook’s article on page 16 on human resource outsourcing (HRO), he states that “many companies are outsourcing their human resource department to increase value, efficiency, and reduce costs.” There is no doubt that HRO continues to gain importance as a way to reduce non-critical administrative cost burdens. Leaders are outsourcing process-intensive operations to focus on strategic issues and
maximize cost-saving opportunities.

Towers Watson has regularly undertaken studies and prepared reports on the effectiveness of HRO. They reported that cost reduction was the top goal driving HRO for almost three-quarters (73%) of the companies polled in 2009. Fifty percent of those polled said that improving HR service quality was a top goal of their HRO efforts. Reducing time-intensive administrative tasks that added minimal value was also a top reason for outsourcing, with 73% of respondents listing it as a key priority for their HRO strategy.

Drake’s Recruitment Process Outsourcing division works with organizations who wish to focus on core competencies and streamline business processes. We provide skilled professionals who focus specifically on human resources, helping you reduce and manage operating costs.

I’m always interested in surveys and outcomes, because the results examine the issues and challenges that decision makers face, and provide a guided opportunity for a company like ours to focus on solutions for our clients.

In its 13th Annual Global CEO Survey, Price Waterhouse Coopers (PWC) reported: “While many companies are still downsizing, more will be adding to their workforces (39%) than will be cutting (25%) over the next 12 months.” They also stated that “struggling to attract and keep talent” continues to be a major issue in many parts of the world. PWC concluded: “Over the long term, businesses may live to regret the drastic headcount reduction they have made during the downturn.” What I also found interesting was that 79% of CEOs in the survey felt they needed to change their strategies for managing talent and that existing reward models were broken across sectors.

This subject ties in well with our feature article, “The Changing Face of Reward”, starting on page 8. It is an excerpt of a study by the Hay Group, who report that reward represents anywhere up to 70% of a company’s total costs. This is a significant percentage! And it is no wonder that reward is now a top management issue, with CEOs getting closely involved and asking pertinent questions. The Hay Group concludes: “Getting the reward right is mission critical for all organizations.”

Also in this issue, New York Times best-selling author Dr. Marshall Goldsmith provides a thought-provoking twist on giving feedback. His 11 reasons to try “feedforward” and not feedback will get you thinking in a different direction. Goldsmith has been recognized as one of the 15 most influential business thinkers in the world in the biannual study sponsored by The (London) Times and Forbes.

Sun Tzu, a Chinese general and great military thinker (c. 500 BCE), said, “Do not demand accomplishment of those who have no talent.” We may be in a different time period, but Sun Tzu’s quote still holds true. Hiring and retaining talent is the key to building and maintaining a solid organizational foundation, not only for the present, but also for the future. Recently, Drake published a White Paper on “10 Steps to Hire the Right Person — The First Time”. This is your guide to ‘talent staffing’, which you can access on our website under ‘Publications’.

In Sun Tzu’s time, there was great conflict and uncertainty, not unlike what we face today. Our global business landscape continues to rapidly change and evolve. It is dynamic, fast-paced, and competitive, and must deal with the effective and efficient use of resources. Competing in this new emerging environment takes talent – from the top down and from the bottom up.

Businessman and author Larry Bossidy said, “If you don’t get the right people, you’ll never fulfill the potential of your business.” To ‘get the right people’, you need to know the behaviours required for success on the job by analyzing the personality traits of your top performers. Personality traits make up a significant 20% to 30% of a successful hiring decision. The selection of your talent team, and their effectiveness, is what drives bottom line results.

That’s where Drake can help. Our suite of talent management solutions has been created to drive organizational effectiveness, business improvement, and your bottom line. We provide our clients with an extensive portfolio of solutions – to help you each step of the way.

R.W. Pollock, Chairman