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And now, BPOs are outsourcing their HR operations

And now, BPOs are outsourcing their HR operations
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First Published: Tue, Apr 22 2008. 11 01 AM IST
Updated: Tue, Apr 22 2008. 11 01 AM IST
New Delhi: The times they are a-changing. In these times of high attrition, companies are seeing sense in outsourcing the recruitment of people. Business Process Outsourcing companies, where attrition rates are as high as 40%, are hiring recruitment process outsourcing companies or RPOs, who guarantee a replacement as soon as somebody quits.
According to Dhirendra Shantilal, senior vice-president, Kelly Services, “As more and more companies need people, there is need to replenish that pool and bring in professionals who can help them achieve their targets and bottomlines. CEOs and HR directors are getting smart and saying, let us outsource this manpower function and focus on our core tasks.”
RPOs such as Kelly Services are projecting 100% growth within the next five years. A Nelson Hall report pegs global RPO growth at 37% and says the industry will be worth $7 billion by 2010. The Indian RPO industry is already worth $2.5 billion.
Not just headhunters
RPOs have even started evolving by not just finding people, but actually training and hiring them. ”The newest trend is to give you a package deal. To give you recruitment with a trained professional. But again entry level more junior, so you don’t have to go through the whole hassle of bringing a person on board”, says Ruvina Singh, director-HR, Dell International Services India.
Companies aren’t just outsourcing hiring. They’re outsourcing the entire human resource department. It’s still not something mid-size and large companies do but for start-ups and small companies HR Outsourcing outfits makes business sense. The HRO’s typically have consultants who have a wealth of experience.
Anurag Gupta, director, DGM India whose company has outsourced its entire HR recruitment says, “In terms of cost, its also beneficial, if I were to hire a similar expertise, it would cost me an arm and a leg. Here I can get that at a cost that is comparable to hiring a junior HR executive.”
Nearly 50% of small businesses and 70% foreign companies like to outsource their human resource needs. They feel it is completely different compared to RPOs.
Says Sairee Chahal, co-founder, SAITA Consulting: “RPO is a high-volume-low-value business, HRO or strategic HR is diametrically opposite. It’s a low volume game in terms of number of things you process or engagements you get into. You can get an RPO for 50 companies but doing a strategic HR for 50 companies means a lot. It’s a much wider engagement.”
There is no uniform payment structure that exists for these RPOs or HROs. The terms and conditions may vary from client to client. Also, in the case of HROs who provide complete solutions from hiring to payroll management to transactional work to induction,the structure may not be a simple per-employee basis. It could be based on the number of manhours the HRO puts in and the quality of resources that are deployed for a particular client.
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First Published: Tue, Apr 22 2008. 11 01 AM IST