24 September 2014

Globalisation, technology and outsourcing drive recruitment trends

Last week I wrote about a few key facts and pieces of data about the recruitment industry globally, that Barry Asin, the President of Staffing Industry Analysts shared at last month's RCSA International Conference held in Queenstown.

This week I'll endeavour to highlight a few of the points Barry made about where the industry is heading, globally, in the near term.

Barry summarised these major near-term trends as follows:

  • Sophistication: In short this translates to the greater formalisation of recruitment and staffing activities and functions (eg RPOs, off shoring, VMS etc).

  • Globalisation driven by technology penetration and adoption: The penetration of technology is both rapid and global. Consider that India (with a population of 1.27 billion people) has a just over 900 million mobile phone subscribers. This technology penetration rate is astonishing considering that 72% of the population live in a rural area and the per capita income (on a purchasing power parity basis) is USD$5,350, placing it in the poorest half of countries in the world.

    Barry spoke about the rapid movement of business to ‘The Cloud' or as Barry labeled it ‘enablement of cloud-based ecosystems'.

    Cloud-driven work services broadly belong to one of three categories;
    Online Staffing (SIA have identified 145 operators including Freelancer, Task Rabbit, Elance etc), Online Services (eg Work Market, Onforce etc) and Crowdsourcing (eg 99Design, Innocentive, Amazon Turk, WikiStrat etc).

    SIA estimate the global online staffing sector is currently (2013) a USD $1.6 billion market. The SIA have made the following estimates of the value of the market in 2020: $16B (conservative), $23B (quite plausible), $47B (aggressive).

  • Outsourced services: The 2014 Contingent Workforce Buyers survey reported the following under the area Projected Increase in Share of Workforce in Ten Years:


    I don't think it takes much of an analysis to see that the global preference for permanent employees is declining rapidly. Whether these global predictions transfer into the Australian and New Zealand environment remains to be seen.
Statement of work/Project workers
(38% net percentage increase)
Outsourced workers
(35%)
Offshore workers
(33%)
Part-time employees
(23%)
Agency/temp workers
(15%)
Online staffing workers
(15%)
Traditional employees
(9%)
Independent contractors/freelancers
(-11%)

  • Regulation and legislative change: Australia and New Zealand are countries (along with the UK, USA and The Netherlands) that have the legislative consistency that underpins progressive work models. This provides a very solid platform for decision makers in Australian and New Zealand in undertaking comprehensive and long term workforce planning.

Unsurprisingly, Barry suggested that the core to success in the near term revolved around the four key areas of:

  • Leadership and culture
  • Strategy
  • People
  • Technology and process

Barry then speculated on the possible longer term scenarios for the recruitment industry and I'll finish this blog series next week with a look at what he shared.


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