Developing an International Sourcing Strategy

It’s May 7, 2005 as I write this, and in today’s news, four headlines were worthy of note. They will affect you, your career, and your company:

“U.S. Job Growth Boosts Outlook.” The robust April report exceeds forecasts and eases concerns about an economic slump. The downside is that interest rates may rise further.

“Animator’s Back in the Job Picture.” Bob Foster, a veteran studio artist who’s been pounding the pavement for more than a year, is one of thousands who found work in April.
“Sun Micro to Grow Four Sites Outside U.S.” Sun Microsystems Inc. said Friday that it was expanding four of its engineering facilities outside the U.S. to save on costs, although the computer and software maker has no plans to cut additional jobs at its Silicon Valley hub. The four research and development centers are in the Indian city of Bangalore, Beijing, Russia’s St. Petersburg, and the Czech Republic capital, Prague.
“Bush Salutes Baltic Freedom, Criticizes Yalta Agreement.” President Bush said Saturday the Soviet domination of central and eastern Europe after World War II will be remembered as “one of the greatest wrongs of history,” and acknowledged that the United States played a significant role in the division of the continent.

Here’s my take on how these rapidly unfolding events affect you and your company. Every company needs an active candidate sourcing strategy. If you can hire great people like Bob Foster by running an ad on a major job board or with some low cost innovative campaign, you should. However, if you can’t find a top person in a few days, then you need to have an option B in place and ready to go. Every company needs a passive candidate sourcing strategy. If you can’t find great people using low-cost channels, then you must be able to instantly switch to target passive candidates. At a minimum, this strategy means access to an internal or external pool of strong recruiters who can network extremely well and turn cold leads into hot candidates. The justification for this must be pre-approved and ready to go on an as-required basis. Every company needs to consider an international sourcing strategy in conjunction with their domestic sourcing programs. Every company should be considering the implementation of a global talent sourcing program. As part of the strategy development, a business case needs to be made evaluating the impact of using high quality, lower cost international talent in comparison to a domestic-only sourcing plan. As the hunt for talent goes global, it’s important to maintain focus on the strategy itself, the effectiveness of the underlying processes, and solid execution. A great strategy that’s coupled with good processes but poorly implemented is doomed to failure. A great strategy with solid execution but built upon weak processes will likewise yield poor results. In either case, don’t blame the strategy. This, however, seems to be a common affliction with recruiting and sourcing. When something doesn’t work as promised ó whether it’s new technology, a new program, or a new strategy ó we typically assume we need something new, whether it be a new strategy, a new technology or a new tool. From my observations, this is rarely the case. The typical problem is generally weak execution or flawed processes to begin with. With this caveat in mind, as you develop an active/passive candidate international sourcing program, make sure you consider strategy, execution, and process collectively. This is the only way you’ll be able to consistently hire high quality people at the lowest cost in the shortest period of time. So before you go global, make sure you get the domestic part right first. This way, any international recruiting programs you implement are based on best practices. For example, an active candidate domestic sourcing program needs to do a few things well to be as effective as possible. Highly visible and compelling advertising is the key to this. Every single job description must be interesting enough to attract a top person. The focus should be on what the person will learn, do, and become, not what the person must have in terms of skills and experiences. Tying these jobs to the company strategy will further improve ad response. From a front-end processing standpoint, candidates must be able to apply simply and quickly. On the back end, the best must be sorted instantaneously and called within hours of applying. The other part of this is a professional employee referral program that pushes the best people to consistently reach out to the best of their former co-workers. How would you rank your active candidate sourcing programs on these measures? If they don’t work as effectively as they could in the U.S., why would they work any better overseas? Passive candidate sourcing is more challenging, both domestically and internationally. On the domestic front, an effective passive candidate sourcing program must rely on two key factors: 1) the creation of an in-house executive search team and 2) the judicious use of a pre-selected network of third-party contingency and executive recruiters. To compete quality-wise with external recruiters, the internal team must be able to work closely with hiring managers, have a strong grasp of real job needs, be effective at making cold calls, be better at interviewing than their clients, and be able to recruit and close top people who aren’t looking for new jobs. Just like the members of a new sales team, recruiters who will be hiring passive candidates, even those with experience, need significant training. On an international level, once the active candidate pool is exhausted, building deep networks of employed talent will be the key to success. From what I’ve seen on an international level, few companies have mastered this part of the puzzle. While important, putting up a shop in some foreign country to perform work that could be done in the U.S. requires another level of sophistication and commitment. In many cases, the analysis and effort required is comparable to any new investment. Here are just a few of things needed to determine if an international sourcing strategy makes sense:

A workforce plan. This is equivalent to the sales forecast and production plan. This must be the baseline to develop a domestic and international sourcing strategy. Surprisingly, many companies don’t have one in place. In order to be able to tap into all of the available sourcing opportunities, you need to know at least six to twelve months ahead of time who you need to hire. This means a quarter-by-quarter forecast of every type of position, with the forecast updated quarterly. An international program requires a much longer commitment ó a few years out, at least.
Global workforce evaluation study. This report includes all of the information needed about the targeted country’s labor force. This involves information like salaries, benefits, numbers of people by classification, economic conditions, availability, education, training, housing, and transportation. Of course, everyone already has this for their U.S. positions to better compare supply and demand.
Organization and infrastructure plan. You’ll need to determine what’s needed from a recruiting and resource perspective to staff and support an international sourcing program.
Competitive analysis. You need to know who else is planning to hire the same workers. If everyone is going to Prague or Bangalore, costs will rise as quality declines. This means the passive sourcing piece will become more important more quickly. This is starting to happen rapidly right now.
Recruitment advertising. This includes everything from employer and job branding to conducting job fairs (or some innovative campaign) and running advertising. The bigger, better, and more visible your company, the easier the task. Once the competition comes to town, the challenges will be similar to those faced in the U.S.
The recruiting team. Great recruiters are the difference-makers when the demand for talent exceeds the supply. This is true in the U.S., or anywhere else, for that matter.
Make the business case. An ROI analysis needs to be conducted to determine the business impact of implementing an international sourcing program. Labor cost savings need to be offset by increases in overhead and infrastructure. Qualitative issues are also part of the evaluation, including community and government reaction, investment and banking issues, and the potential impact on your current and future customer base.

These are just a few of the issues that need to be considered in order to create a sophisticated international sourcing strategy. While this type of international option must be considered, I’m not sure that all of those companies moving forward on this have optimized their domestic sourcing programs to the degree possible, so going international won’t have the maximum impact. For proof, just look at the career websites of those companies already sourcing internationally. Many are cumbersome to use; the jobs descriptions are boring; and candidates are treated as commodities and not as valuable strategic assets. To me, this is another example of a good strategy built upon weak processes or bad execution. Yet I also see this is as a great opportunity for proactive corporate recruiting leaders and recruiters themselves to get more involved. Now, as I’m about to put the wraps on this article, I pick up the current issue of Business Week (May 16, 2005) and read a review of Richard Florida’s new book, The Flight of the Creative Class: The New Global Competition for Talent. The reviewer, while considering the quantitative part of the book flawed, agrees with the premise that the hunt for talent requires a global perspective. My point here, however, is that while going global makes great sense, it’s not a cure-all. Great strategy requires great implementation and appropriate processes to ensure success. Pulling it off domestically is a challenge few companies have completely mastered. And while new tools and technologies are becoming available on an ongoing basis, these are offset by increasing hiring demands, more rapid changes, and the added complexities of working on a global scale. The less obvious but more important point of this article is that the demand for great recruiters and great recruiting leadership will increase at a more rapid rate than ever before. So stay on top your game. There’s a story to be told here. You’ll be involved and many of you will be helping write it.