The Demands of Globalization—And How the Recruitment Industry Can Meet Them

close gapsFor nearly a decade, industry professionals and academic researchers have talked about the globalization of staffing and recruitment. But what do they mean by ‘globalization’? And why are firms struggling to compete in a global marketplace?

I would break globalization into three separate trends. First, we see firms large and small expanding abroad, typically to meet the demands of their domestic clients. Second, we see the value of talent and services increasingly determined by international rather than local supply and demand. And third, we find that technology is a common denominator in both globalization and the immense challenges of managing a global firm. Thus, I would argue that recruitment firms that employ the right technology stand to gain a competitive advantage in the age of globalization.

The Need for Global Talent is Rising

The staffing and recruitment industry is globalizing thanks in large part to multinational firms that are struggling to gain a foothold in emerging markets.

According to the Boston Consulting Group’s 2013 Globalization Readiness Survey, 78 percent of multinational companies expect to gain market share in emerging economies, but only 13 percent say they have an advantage against local competitors and only 9 percent of companies’ top 20 leaders are based in emerging markets. Furthermore, multinational executives report that their companies displayed the largest performance gap in attracting and retaining talent.

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To solve this dilemma, multinational companies rely on both small and enterprise recruitment firms to find and retain talent abroad. As globalization motivates retailers, professional service providers and software companies to penetrate the BRICS and MIST economies (Mexico, Indonesia, South Korea, Turkey), firms need local executives and managers. Only local leaders with intimate market knowledge can overcome cultural gaps, adapt to local business norms and ultimately translate a foreign company’s mission into a South Korean or Turkish version.

Essentially, staffing and recruitment firms that globalize stand to win business where their clients are growing rapidly yet struggling to find and retain talent.

A Global Marketplace for Talent Increasingly Drives Supply and Demand

Before the Internet and the steep decline of telecommunication prices, local and regional market conditions determined the supply and demand of talent. Today, young software engineering graduates in Bangalore, India affect the temporary staffing market in Silicon Valley. If the Bangalore engineers can complete the same programming work as Silicon Valley engineers at less than a fifth of the price, they affect the value of labor not in only in California but around the world.

Programming, data science, marketing research, helpdesk support and even recruitment sourcing work can now be offshored, which means companies need global staffing and recruitment firms that understand the marketplace and can help them find the highest quality labor at the lowest possible price. Recruitment firms with an international presence stand the best chance of winning contracts that will benefit from this arbitrage in global talent.

Technology Set the Global Staffing Firm Apart from Competitors

For a staffing and recruitment firm to successfully launch an international office in Singapore or manage 40 offices across the world, they need technology that can support a global workflow. Today, global offices might have the same logo and executives, but they divide along technological lines. The Silicon Valley and Singapore office might serve the same client, but they can’t even look at the same recruitment database and applicant tracking system (ATS).

In other words, technology is limiting their ability to serve one client who may have requisitions in both Silicon Valley and Singapore. Global firms need to implement software that every global office can rely on. Recruiters should be able to access the same multilingual recruitment database, sourcing tools, documents and internal communication systems to collaborate efficiently. A single system also allows company executives to track revenue globally,produce data analytics that reveal the firm’s overall performance and see office-by-office variations. Firms with this degree of technological unity and self-awareness will outmatch their competitors abroad

As long as multinational firms remain focused on foreign markets, and so long as technology continues to increase the variety of services that can be performed from any location, staffing and recruitment firms will continue to globalize. The pressures of globalization have the potential to impede information sharing, fragment recruitment firms along cultural lines and make global performance metrics invisible. And while technology may be the engine behind globalization, technology can also solve these operational challenges globalization. Technology will divide the firms that fail or thrive abroad.

MORE: The shift toward mobile recruitment

Brandon Metcalf
Brandon Metcalf is COO and co-founder of Talent Rover.

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