ManpowerGroup, the world leader in innovative workforce solutions, today announced a new contract, worth at least $400 million over five years, for Recruiting Services to the Australian Defence Force (ADF). The new contract renews ManpowerGroup's Recruitment Process Outsourcing collaboration with the ADF for the next five years – setting a record as the industry's largest Recruitment Process Outsourcing partnership.
The contract covers the entire recruiting process – including marketing, recruiting operations, medical and psychological assessments and the coordination of selection boards and employment offers. This unique private-public collaborative effort was an industry first and continues to evolve into its second decade.
Outsourcing is the process of contracting an existing business function or process of an organization to an external independent organization, and ceasing to perform that function or process internally, instead purchasing it as a service. Though this practice of purchasing a business function–instead of providing it internally–is a common feature of any modern economy, the term outsourcing became popular in America. The opposite of outsourcing is called vertical integration or insourcing.
There is a lot of debate over outsourcing. Proponents insist that outsourcing saves money for companies, opens up opportunities and jobs at a higher level. Opponents against outsourcing argue that hiring people from foreign countries strips thousands of Americans of jobs, especially the skilled and semi-skilled workers. All the points seem valid in their place. Outsourcing is a difficult issue to tackle and everyone, the supporters and detractors agree on one thing – that outsourcing cannot be eliminated completely.
India is one of the most preferred IT outsourcing destinations for companies in the US and Europe. HCL Technologies is India's fourth-largest software exporter by sales, and gets more than half its revenue from the US. The company expects US clients' technology spending on outsourcing to gather pace as the US economy improves, although sales from the US continue to be below average in the current quarter.
The company said that new orders from the US are mostly discretionary or non-essential in nature and translate to projects that are for a limited period of time. In contrast, revenue generated from Europe is mostly from on-going cost-saving projects which are of a longer duration. Revenue growth in the US continues to be driven by increased spending from clients in the healthcare and pharma businesses, and regulatory changes in financial services. Uncertainty still prevails on the future of spending in telecommunications.
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China has often been criticized for lax data privacy protection by IT outsourcing companies, but the government's new proposal for data security guidelines may go too far in the opposite direction. The guidelines are intended to better protect the privacy of Chinese citizens and provide guidance for international businesses operating in the country.
They contain a set of broadly applicable rules and principles for storing, handling and transferring personal information. Some business leaders are concerned that the regulations as currently written are stricter then US or European standards, and could cause serious damage to China's growing IT and business process outsourcing industry and its customers. The guidelines require that express consent from an individual must be obtained in connection with the transfer of personal information to any other organization. This could prevent transfers of data to company affiliates, creating a significant impediment to outsourcing.