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Business strategy catches on
Published on Friday, 12 Aug 2011
Illustration: Bay Leung
Gina McLellan
Caleb Baker

Regardless of the state of the economy, employers in Asia know that sustained success in any sector depends on effective talent management.

With that in mind, they are refocusing HR strategies to give more time and attention to issues that differentiate such as training, career development and staff retention. They are realigning workloads and responsibilities, contracting out the more administrative HR functions to create updated operating models and new opportunities for suitable service providers.

The results of a second-quarter online survey conducted for recruitment and outsourcing firm, Talent 2, confirm this trend. Feedback from more than 570 HR executives and corporate leaders in Hong Kong, China, Singapore and Australia revealed that between 80 and 90 per cent of respondents are thinking of outsourcing to boost efficiency and improve results. Functions involved typically include payroll, recruitment, learning, and standardised tasks like administering leave entitlements.

"One of the most surprising things was the number of companies shifting in this direction," says Caleb Baker, Asia Pacific managing director for Talent 2. "They clearly see it as a strategic solution, not just a cost-cutting tactic."

Employers pick and choose what they need and manage costs in line with demand. He stresses that the trend towards outsourcing doesn't mean there will be fewer jobs around for HR specialists. Employers will still need their skills to handle the less procedural, more strategic aspects of hiring, integrating, deploying and caring for staff.

"Any perception that the HR workforce is losing jobs is misplaced," Baker says. "The reality is straight-forward: people can redeploy and re-skill, and counselling or things that belong to the client's culture and values, we don't [touch]."

Gina McLellan, managing director, Asia, for Talent 2, says the firm has thousands of people on its books.

The financial crisis may initially have prompted companies in Asia to consider outsourcing, but attitudes towards the so-called contracted workforce - and the flexibility it provides - are becoming more like in developed western economies. "It is gaining traction, though Hong Kong is not yet as strong an adopter of the idea as Singapore or Australia," McLellan says. "But companies in FMCG, healthcare and pharmaceuticals, not just finance or IT, now see it as an important tool and realise it allows them to focus on their core capabilities and competencies." Typically, outsourcing contracts run for three to five years. Targets and incremental returns on investment should be understood up front. They must be measurable and deliverable.

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