- Jo Faragher
Typically when recession hits, organisations batten down the hatches and bring all of their services in house.
That way, they can control costs and make sure their investment is directed in the right way.
So it’s surely a positive trend – and an indication that recovery is really happening – that the average value of HR outsourcing contracts is on the rise.
According to research from arvato UK, investment in HR outsourcing rose by 24% year on year during the third quarter of 2014.
Of course, a key service for HR to outsource is recruitment, so this should be good news for agencies, too. For those who are signed up to managed vendor lists, this should hopefully mean more work and a greater chunk of the resultant revenue. Recruitment was the second most popular service line to outsource, according to arvato, accounting for 36% of services.
The report also picks up how organisations increasingly trust recruiters with key elements of the hiring process, and have become comfortable again to entrust these to a partner rather than trying to cope with them as an in-house team.
Arvato found that outsourcers were increasingly involved in ‘judgement-based’ activities such as candidate vetting and shortlisting.
Even for those recruitment companies who don’t get involved in major outsourcing deals, the upward trend in outsourcing spend should offer some reassurance, as should the depth of activity recruiters are getting involved in.
Behind this is an increase in trust and a confidence that growth is on the horizon, so employers are looking for support to find the right people to help them achieve that growth.
Furthermore, it also shows that hiring bosses see how outsourcing aspects of HR such as recruitment can help them scale up quickly in an unpredictable economy. If a business wants to launch a competitive new division or move into a new market, this is the way to go.
Here’s hoping that the benefit gets passed down the supply chain to the recruiters sourcing that star talent.