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Special Report: APAC but the relative immaturity of the Asia-Pacific (APAC) market and its current focus on transitional rather than transformational processes is also creating challenges for the profession. "The biggest driver for outsourcing transaction is still cost," Gerry Clark, partner and regional director of TPI told delegates at this spring's Summit in Singapore. Clark pointed out that while a lot of service providers are trying to come in with a value proposition, most leaders in the finance and accounting space, in particular, are really looking at HR from a transactional, rather than transformational, standpoint. "But I think transformation basis is really when you start bringing value to the table," Clark added. During a break in the conference, Katrina Ritchie, group HR manager, projects and planning at Fonterra, the multinational dairy, agreed: "I think the Asian HRO market is still at the beginning of the process. At this stage, it's still very transactional and not transformational. I think there are still a lot of people here that want to be 'the thinker' and only want to outsource the burden of the process, which is quite different from what we've done at Fonterra. We've already moved from the transactional to the transformational. In my view I'm not outsourcing a process, I'm asking them to come and run my recruitment function and that's very, very different." Ritchie had addressed the conference's Buyers-Only Forum the previous day and presented a case study on the evolution of her company's recruitment model, providing insights on a strategic RPO initiative that her company started with Futurestep three years ago. She said that the RPO had given her HR department access to a higher standard of "operator and thinker" than it could have while directly managing itself. Ritchie contended that many HR leaders in Asia at this stage remain concerned with issues of change management, pursuing values that are not cost-based. "Asia is becoming a lot more expensive to outsource in. It's no longer the cheaper option, and it might be hard for HR professionals to get the tangible benefits they need for their management to sign off. Clearly as an HR professional you have to articulate other reasons," she said. According to the 14th annual by PwC, the race for talent in 2011 is as intense as it has ever been and has once again been cited by CEOs as the hottest issue on their agendas. "I think it's not an exaggeration to say we're at an historical point," Mano Ramakrishnan, head of research and education at the Human Capital Leadership Institute, told delegates. "Never before have so many people moved so quickly from poverty to a more sustainable, more middle-class existence. This paints a very optimistic picture, but there are two sides to every story. Yes, by far, Asia Pacific is seen as the growth engine of the world, but on the other side, CEOs see considerable risk, which could be geopolitical risk of talent management supply. The risks are real and they have to be addressed." Ramakrishnan noted that while APAC has seen strong growth, with many companies going regional and global, real challenges exist about talent supply and talent management that need to be solved in order to sustain that economic growth. Solving challenges of global mobility, as well as hiring a new generation whose members live their lives on social media platforms, are now key challenges for HR departments, and many now see recruitment outsourcing as providing the answer. "People are expecting a very different experience at work. They want to be able to interact online. From a recruitment perspective, we need the ability to use LinkedIn, Twitter, and Facebook. That's not something I'm specialized in," noted Ritchie. Gartner Research Director TJ Singh added that according to a recent APAC survey, 45 percent of clients planning to outsource were looking at recruitment outsourcing. Speaking on the sidelines of the conference, Mary Sue Rogers, general manager of global HR, learning, and recruiting at IBM, said she had seen an upturn in HRO in Asia. "There is a lot of demand for payroll- only services, which is not something IBM provides, but I am also seeing multicountry clients looking to implement more standardization in their HR practice to avoid duplication in their HR function. We are starting to see inflationary wages in many Asian countries, such as Vietnam, and having an HR department in every country is not always the best model. You can't keep putting more people in HR, because it's not going to be sustainable over the long term." Melanie Fitzpatrick, Marketing Director of Talent2, agreed: "I personally feel the HR world is poised for a revolution. There are some very exciting things coming through, and it will really start to move very quickly in the next 18 months." SUMMER 2011 | www.hroglobal.com [11] HRO T oday Global Global CEO Survey

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