Outsourcing Rates Low Among CIOs Surveyed
[Talent Management Magazine January 29, 2008 | Volume 4, Issue 8]
Despite the attention focused on the outsourcing of technology jobs overseas, a recent survey by Robert Half Technology shows the majority of U.S. companies are not engaged in the practice. Ninety-four percent of chief information officers (CIOs) surveyed said their company does not outsource information technology (IT) jobs outside the United States.
Among companies that once sent IT jobs overseas but discontinued the practice, nearly six in 10 (59 percent) respondents cited management challenges as the top reason.
The study, developed by Robert Half Technology, a leading provider of information technology professionals on a project and full-time basis and conducted by an independent research firm, is based on telephone interviews with 1,400 CIOs across the United States.
CIOs were asked, "Does your company currently outsource technology jobs outside of the United States (i.e., do you engage in offshore outsourcing) ?"
No - 94%
Yes - 5%
Don't know - 1%
These percentages appear unlikely to change significantly in the near future, as most survey respondents expected a continuation of the status quo.
CIOs also were asked, "In the next two years, how will your company's level of offshore outsourcing change?"
Increase - 7%
Decrease - 4%
No change - 86%
Don't know - 3%
"Challenges such as language, culture and time-zone barriers can sometimes outweigh the potential benefits of outsourcing, " said Katherine Spencer Lee, executive director of Robert Half Technology. "Smaller companies, in particular, may lack the resources to commit to an effective long-term offshoring strategy."
Lee further explained that many companies are keeping IT functions in-house to preserve the close collaboration that helps build nimble work teams. "IT professionals are taking on more complex roles that require frequent interaction with colleagues outside the department, including company executives. Hiring managers seek professionals with strong communication skills and business acumen, who are able to collaborate with technical and nontechnical co-workers and customers alike."
Large Companies More Likely to Outsource
The survey shows that large companies (those with 500 or more employees) are much more likely to engage in overseas technology outsourcing than small ones (those with fewer than 500 employees). In companies with more than 500 employees, 11 percent of CIOs reported that they currently engage in outsourcing, compared to 5 percent overall.
CIOs were asked, "Does your company currently outsource technology jobs outside of the United States?" (responses, by company size):
Company Size Percentage outsourcing offshore
1000+ 11%
500-999 11%
250-499 8%
100-249 3%
"Researching viable vendors and teaching them about the company and its products, management style and quality control require a substantial investment," Lee said. "Large companies may be better positioned to absorb the costs of both initial setup and ongoing oversight, and to benefit from economies of scale."
In the near future, growth in offshore outsourcing likely is to come primarily from companies already outsourcing, not from those that are new to the practice: 43 percent of respondents from companies that engage in offshore outsourcing said they plan to increase their level of offshore outsourcing in the next two years, versus 13 percent who said they expect levels to decrease.
Management Requirements and Other Hurdles
According to the survey, management challenges are a common obstacle to successful offshoring. More than half (59 percent) of CIOs whose companies had stopped offshore outsourcing cited management and oversight requirements among the reasons they had done so. Unrealized cost savings and quality control also were factors, cited by 30 percent and 23 percent of respondents, respectively.
CIOs at companies that have engaged in offshore outsourcing but currently do not were asked, "Which of the following were reasons you stopped offshore outsourcing? " (Multiple responses were allowed.)
Required too much oversight/managemen t - 59%
Cost savings were not realized - 30%
Quality of work not good enough - 23%
Lowered morale of U.S.-based workers - 11%
Security concerns - 6%
Other - 14%
Don't know - 5%
To Outsource or Not?
For firms contemplating offshore outsourcing, Lee pointed out some strategies to consider:
1. Look for stability.
Choose a vendor that has a track record of measuring staff turnover and retaining employees. Seek a company that has a succession plan in place, as well as defined career paths for their IT professionals.
2. Setup time and costs.
New jobs or even departments may need to be created to handle vendor selection, manage contracts, train workers and oversee remote work teams.
3. Management challenges.
Dispersed IT work teams may require a different level and type of oversight from management. Consider offering training for managers who will lead overseas teams and will likely be managing individuals who may be very different from them, in terms of culture, background and experience. Some companies may find they need a full-time project manager to oversee the offshore vendor.
4. Security and privacy concerns.
Intellectual property risks such as the enforcement of patents, copyrights and trade secrets may require additional oversight and resources. Benchmark best practices in the areas of security and proprietary technology, for example, from similar companies that have done it successfully.
______________________________________________________________________________________
Survey Says: Behavioral Interviewing on the Rise
by Kellye Whitney
[Talent Management Magazine January 31, 2008 | Volume 4, Issue 9]
A recent Novations Group survey of more than 2,500 senior HR executives in the U.S. and Canada suggested the use of behavioral interviewing to screen job candidates will grow dramatically as hiring managers seek out ways to make the most of an increasingly diverse talent pool.
Some 55.7 percent of respondents stated they plan to use behavioral interviewing as often as in the past, and 24.7 percent plan to use behavioral interviewing more often.
Behavioral interviewing, or attempting to predict a job candidate's suitability based on past behavior, is on the rise because more HR and talent managers look on the tactic as a best practice, said Tim Vigue, executive consultant, Novations Inc.
"It's been around a long time, and it's been used successfully, " he explained. "Word on the street amongst colleagues spread that this is a good way to get good information, be accurate and get the right people in the right job. So it's beyond the fad point, and those that haven't caught on are saying, 'We've got to do more of this either in a small way to make it more consistent and use it across the board,' or maybe an organization has never used the approach but recognized it as a best practice and decided they need to do it."
Vigue said talent managers recognize the pool of qualified job candidates is becoming more and more diverse, which necessitates more objective methods to define who best fits available positions. Behavioral interviewing is one solution.
"Traditional methods of conversational interviews or hiring the people you have the best feeling about is really not a good way to do it because that potentially leads to the elimination of folks who could have done a very good job," he said. "HR executives need a way, a method, a tool for their managers to use that will prevent those kinds of mistakes."
The high costs associated with hiring mistakes virtually require that talent managers consistently use a more reliable approach. Nor can talent managers take the chance on making a wrong decision and potentially limiting their available talent pool because they haven't accurately predicted a candidate's abilities. Many realize this. Unfortunately, in an effort to avoid the aforementioned scenarios, Vigue said hiring managers often do behavioral interviewing incorrectly. Rather, they don't do it in a way that will elicit the results they need.
"Probably one of the biggest mistakes that folks make is they don't probe enough for detail," Vigue said. "They ask a question about a past event, which is what behavioral interviewing is, and the candidate gives a very surface answer or perhaps not an example of a behavior but more of a general statement. The interviewer either likes or does not like their answer and moves on to the next question. They aren't getting the kind of date and information that really makes behavioral interviewing successful, and they're not doing much more than they would in the typical, conversational, intuitive interview, where they ask people what their strengths and weaknesses are."
Further, in order to make behavioral interviewing work to best advantage, talent managers must identify required job competencies for incoming candidates.
"If the folks doing the hiring haven't identified what behaviors they need, and usually that's done through some sort of job analysis, they're probably not going to get what they want," Vigue said. "Many times, the interview team itself won't agree. They'll sit around and say, 'We want someone who's bright and capable and learns quickly and shows initiative,' but they haven't defined what those things are and what are the behaviors really going to look like. Folks have to define the skills and then write questions that will make it easier. That saves everybody a lot of time too because, when you've done it once, you don't have to do it every time a new candidate comes in."
[About the Author: Kellye Whitney is managing editor for Talent Management magazine.]
No comments:
Post a Comment