How trends are changing in BPO recruitment

SSON: Michael, everyone is talking about a ‘rebound’ if you like, of the market. From a shared services and outsourcing perspective, this means that there is generally an upswing in business. What does this mean to you, as a recruitment specialist in the IT services and BPO sector?

Michael DeSimone:
I’d completely agree with what you are seeing. Over the past 18 months there have been two big ‘about turns’. The first, and most obvious, change occurred late in 2008, and carried all the way through to early 2010. During this period we saw a change in search specs towards an entirely new market, namely, for people who are great at cost control and driving operational efficiencies. This reflected a new demand for non client-facing, internally-focused executives who were good at running efficient delivery practices.  The second big change started in early 2010, and has picked up momentum over the past year; it marks a return to the growth-fuelled recruiting practices of the late 90s and early 2000s. We’re now seeing a return to confidence and a willingness to invest in growth, in leaders who’ll lead from the front, from a client and sales standpoint.

SSON: Focusing on the first change, in 2008 –- what kind of roles were you filling during this time period? Were they markedly different than before?

MD: Yes, they were. Here’s an example that illustrates the trend I’m describing: We filled a very senior role at a F100 global outsourcing and technology company. The role entailed a total ‘re-engineering’ of the business; a re-evaluation of how this company delivered ITO services to their clients: the platforms, the technology, the delivery methodology, how many people it took, at what cost, etc. Effectively, this position was about optimizing the manner in which the company delivered ITO services.

This kind of role really was a first, for me. Most of what I’d seen in my particular practice over the previous 4-5 years had been externally focused, in support of growth – managing client relationships, or running P&L. Basically, what we were suddenly seeing was the market acknowledging that there was not a lot of business out there - that the slice of the pie would be small, in any case, and that, therefore, it made sense to focus on getting your operation as lean and efficient as possible. The pressing challenge was: ‘how do we get smarter about the way we run our business?’ as opposed to ‘how do we grow our business?’

SSON: So tell me about the current situation.

MD: Now we’ve come full circle. Starting in early 2010, we slowly saw a realignment back to what we’d been used to seeing before - a demand for sales oriented general managers – people that would drive growth. So many of those positions had been taken out, of course, during the down period, when providers acknowledged that it made sense to focus on what could be controlled rather than what could not; ie, investing in how services were delivered rather than client acquisition. Back then, 80% of our business was probably taken up by this ‘efficiency’ kind of role. Now that is back to 20%.

SSON: When this first change occurred, in 2008/2009, where did you find these people – the ones with an operational focus? I imagine that they were not as obvious to identify as the more outward facing executives.

MD: You are right. To be honest, it was a new market for us. These people were harder to find, given their internal focus, than the sales-oriented and general management folks we were used to dealing with, so it was more challenging to identify and extract them. And they weren’t really used to hearing from people like us. We found a lot of these folks in ‘industry.’ The financial services industry, in particular, felt the effects first and had been hit hard. We also looked to many of the more regulated industries, for candidates. In the example I cited earlier, the candidate we placed came from an F100 financial services company.

SSON: So how are things different in the recruitment space for the provider industry today?

MD: Today Fortune 1000 buyers of outsourcing services are more savvy about their needs and how to qualify / evaluate a potential service provider. Providers, in turn, are looking for people to lead them in meeting this challenge. In an interview setting, service provider leaders are asking for a lot more up-front information, when they evaluate a prospective candidate. The days of going by gut feeling are long gone. Now it’s common for a candidate to be asked to prepare a case study on a delivery or sales strategy up front, and to provide proof of their experience. Interviews are a lot more granular and candidates are being asked to prove themselves before a commitment is made.

SSON: What are the main challenges for you in today’s market?

MD: It seems that all of our positions are becoming vertical and industry-based in nature, whereas that used to apply almost exclusively to application services and consulting. There is a level of vertical domain expertise that has become table stakes – even in BPO, where you might consider, for example, F&A in manufacturing not that different from F&A in retail. We now see providers doing what they can to verticalize all of their offerings, not just traditional applications. We are even seeing this in infrastructure, where companies are looking to build full-blown consulting organizations to help them differentiate the way they provide data center, network, and security services to a bank vs. a retail company, for example. So specialization from a vertical standpoint is huge.

SSON: How easy was it to persuade people to consider new positions over the past 18 months? What about now?

MD: It was pretty tough in 2008-2009. Those still employed, whom you might consider to be in the top 25-30% in terms of performance, were not really looking to move, no matter how lucrative an offer. They were more likely to stay where they were a known quantity, where they had a track record, than join an operation that was unlikely to grow in the short term and that might be embarking on a cost-cutting strategy - in which case last in, first out, was too real a possibility. But there was a lot of movement from the population of unemployed, and from those that did not feel they were secure in their jobs.

Now, over the last 12 months or so, we are seeing a renewed sense of confidence and the best people are receptive to considering new opportunities.

SSON: How much of an increase are you seeing in recruitment activity, in terms of absolute numbers?

MD: Well, consider this: CT Partners has been in operation for 30 years. We witnessed the incredible highs of the late 90s and early 2000s, when e-business came onto the scene – where offers were made on the spot, and when the market was good for everybody. Bearing that in mind, 2010 saw us make more placements than in any other year in the history of our firm. It was really a great year. This says as much about the extent to which the market is coming back - and the commitment to strong leadership - as it does about CT Partners.

SSON: What about the offers? What can a qualified executive expect from the provider market?

MD: We are seeing a return to the concepts of sign-on bonus and restricted stock units that were a mark of late 90s-era recruitment – it’s definitely becoming more of a candidate-driven market than a client driven one. This started slowly in late 2009, but many employers are still unwilling to accept that they really no longer have the leverage they thought they had.

Another indication of the return to better times is the fact that in 2010 it was not unusual for a high-level candidate to be lining up two or three different interview scenarios, effectively playing multiple opportunities off against each other. We did not see much of that in 2008 or 2009.