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I get calls 4-5 times a week from outsourced providers all over the world offering their services to help me offset my internal sourcing/Name Generation costs.
They all promise the highest quality, fastest turn around and exclaim that their researchers are typically, BA, BS, MS, MA PhD's whatever.
What I'm amazed is that the cost of a Name varies greatly from country to country.
How low can the cost of Name Generation go?
When I started out, in 1995, we charged $10 a name (all phone generated by the way) and paid our researchers $5 per name. Then we went to $15, then $20 then $30 and today HTC charges $50 per name and we haven't raised our prices in at least 5 years.
I know there was a discussion on this forum a while back about how Name Generation has become commoditized, especially Internet Name Generation but at what point does the value of the candidate's name or access to it out value the cost to produce or the value a Company would get out of it?
At what point does quality outweigh the cost? Do clients care, if they can buy a name for $5 or $50 at $5 does quality really matter that much?
Are Internet Generated Names inherently worth Less than Phone generated names due to the ease of generating them. And if so why aren't Internet Name Generators lowering their prices to be more competitve with offshore options.
FYI I have yet to see an offshore Sourcing company offer phone based Name Generation. Why not, isn't the fact that they haven't offered phone Name Generation so far a testament to how easy Internet Name Generation is and how difficult Phone NG can be?
Jeff Weidner HTC Research Corp jeffweidnerlinkedin@gmail.com 925 313 9005 X 200
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Hi Folks,
I'm doing some research on sourcing costs and I found this old thread. I'd like to revive it for 2009.
What are your current per-name charges for sourcing, and what services do you provide?
Thank You,
Keith Halperin keithsrj@sbcglobal.net 415.586.8265
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Jeff, hi
Great thread you started.
There has been a real flurry on this forum over the last week or two around offshoring, internet v tele sourcing and the costs associated. Good to see.
I started one of the earliest offshore RPO practices in India in 2002, www.OS2i.com, so I�??m chiming in with a slight vested interested but certainly feel I have earned the right to say �??been there, done that, got the T-shirt�??. Hopefully you�??ll feel the same.
Internet v tele sourcing;
The internet and the telephone go together like a gin and tonic. Get the combination right and you have the perfect drink, get it wrong and all you have is a drink made up of two liquids.
To source the maximum amount of candidates use both. In my opinion these are two totally different skills sets, so if you want the best they should be done by specialists.
I have never heard that Shally Steckerl is a demon on the phone, that he can map entire departments with one call. However we all know that he can put a search string together that will blow our minds. Similarly I have never heard Maureen Sharib describe how a filetype search uncovered any employee directory but by god, she can get some amazing results on the phone. But wouldn�??t Maureen and Shally make a up dynamic duo? I wonder which one would be batman?
Within OS2i we have some amazing internet sourcers, many have been mentioned in the top 10 of the last few sourcecon challenges. This hasn�??t happened overnight, since our humble beginning we have focused a lot of time, energy and training to reach this standard. Whenever we undertake main stream sourcing training e.g. AIRS etc to check that we are at the top of our game, we slap ourselves on our backs and remark how basic the level is.
Internet sourcers are undoubtedly a powerful tool but without a basic level of telephone validation a lot of data is out of date so selling it �??per name�?? is useless. This is where you begin to see how well internet and tele sourcing go together.
If you are calling into a company to validate that John Brown is still Sales Manager then why not use this opportunity to source more Sales Managers. The fact that you know that name of John Brown (either still employed or left) gets you a pretty big foot in their door with the gatekeeper.
Two years ago a large European RPO client setting up in Hong Kong asked us to do some market mapping. After a few days internet sourcing the information was drying up so we got on the phone and started generating information that way. This was the beginning of OS2i�??s entry into telephone based name generation.
Proficiency didn�??t come overnight; we gained momentum by carefully rolling out our name generation (telephone & internet) solutions in a staggered effect. First Asia-Pac-Middle East then Europe and this year the USA. We moved into each region after achieving certain milestones. Our teams have undertaken USA based telephone based name sourcing training, we have had European Researchers in India over extended periods training our teams. In a nutshell we have taken as much external training as we could get our hands on then setup a rigorous name generation internal training department, added strong quality systems and always focus on over delivery with outstanding results.
The comment about gatekeepers not understanding the Indian accent so offshore name generation wouldn�??t work made me laugh. Even though our tele-sourcers are classified as accent-neutral they have a slight accent, however this accent often gives them a distinct advantage. Gatekeepers are always a little off balance when dealing with someone with an accent. I know from doing Research in the UK in the 90�??s that a smooth talking Londoner asking for information which generally shouldn�??t be given out would raise suspicion very quickly. Get a gatekeeper off balance with an accent, a stutter or something out of the ordinary and you have them where you want them.
Our pure internet sourcing solutions were never received with the glee that our internet AND tele-sourcing is, together they combine to make the prefect gin and tonic.
How low can the per name cost go?
This is the scary thing. Although we have 160 eRecruiters/Sourcers in India we have a very large onshore team in the UK / US which means our cost base is a lot higher that most pure offshore RPO�??s. However we have always felt that our onshore recruiting expertise, onsite transitioning and account management has been the secret to our success. On how low can the per name cost go I have a prediction. A lot of pure offshore RPO�??s will (very soon) start selling telephone based name generation solutions over the coming year, in the short to medium term the quality won�??t be great which will be good news for onshore solution providers. However in a year or two these firms will find their feet and start hitting quality levels which when benchmarked against onshore quality/cost will mean prices will come down.
After all a name is a name, how and where it�??s been gained isn�??t relevant.
My 2 cents....happy hunting.
Regan George CEO �?? www.OS2i.com regan@os2i.com
PS �?? Jeff, by the way great blog about clients asking for no LinkedIn contacts in their research
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Let me make some clarifications on some of the comments so far.
Mary: Please re-read the original post. This is question about the cost of delivering a service. It's not about process. No matter how you slice it if Sourcing Firm A base in India/South America/Eastern Europe/Africa etc pays their people $200 a month and the US based firm pays $1280 (min wage of $8 per hour times 160 hours per month) then all the process in the world will not make a difference in the price the US firm can charge their client, it can not be lower that the cost to produce said service. My point was that Internet Name Generation can be done by anyone, anywhere in the world at any time. All you need is access to the internet and a few hours of training and off you go. (I'm over exaggerating the amount of training needed to make a point) But it was a nice plug for SGA none-the-less no matter how irrelevant I feel your comment was to the topic at hand.
Josh/Vipul - Great banter. Good points made and let me add that employee costs will climb for companies in those offshore locations. The more companies have to compete for experienced employees the more their employees costs shift. In the beginning these offshore companies will spend a lot of time and money training employees, as an employee base gains experience over many years other companies will attempt to recruit them away to reduce their training costs. By speaking with many RPO companies in India, SA and Eastern Europe I'm seeing this happening already. A few companies are in those three areas are in strategic battles with their competitors to keep employee costs to a minimum. In one area employees costs have tripled in the past 5 years and are continuing to rise. Inevitably, as the market matures and employees gain more experience, there will be more employment options for people with those skills and salaries in those offshore areas will rise. Disclaimer: As with any investment opportunity individual results may vary. These statements are not in any way a guarantee that you or your company will obtain any level of success should you decide to take part in this opportunity. Use of, being associated with or providing these services may cause fever, fainting, rash, sleeplessness, vomiting and in rare cases body odor and addiction to caffeine, chocolate or other substances. Sorry, I felt had to lighten the post up a bit�??
Cultural issues and language barriers will not be barriers for much longer. These companies will find ways to offset those issues, they will shift their training tactics from a "how and what to do to" to a cultural training and language training. Admittedly this is (from my understanding) is much harder to train for but the successful companies will hire people that were educated here in the USA or UK or Australia so that they will have less of a hurdle. In short, it is difficult but not impossible. There are challenges but they can be overcome with the right training and if they companies hire people with the right backgrounds.
Patrick: CPD-Candidate Pipeline Development(TM) is actually trade marked by my company HTC Research and so as not to confuse the market I'd like to state that the prices quoted in your comment were not HTC's prices or service offerings.
Also let's extrapolate Patrick's point a bit further. Instead of $8 a name what if a company opens up an office somewhere where the employee costs could be $1 USD per day. They would now offer their names at let's say 50 cents per name. And the quality is just as good if not better. This same thing happened to the data service providers when email addresses started being farmed on the Internet. Sales People and list brokers would sell names at a $5 per name not they are 50 cents, 5 cents, 1 cent per name and even lower for unverified Sales Leads. What force in the staffing market that will stop this from happening to Internet Generated names? AND if you can get a computer to do all of it for you that could reduce costs even further.
Stella: Time difference is not as big a problem as you may think. The fact that India is 12 hrs ahead of us makes little difference. India is not the only off-shoring country out there and SA is for the most part in the US time zone. The Internet is open 24 hours a day, 7 days a week. Now verifying those names by telephone is more difficult at night but not entirely impossible with the right techniques ;-) I know of one offshore company that does the internet name generation in India then they dump those names into their DB for their group in Eastern Europe and Africa to call and verify and then they have their group in SA recruit the candidates for contingency fees and all their business development people are based here in the USA. Amazingly though, they still charge a full 20%-30% placement fee. So it's what the market will accept.
OK I didn�??t mean to ramble on for this long so enough for now, replies/rebuttals welcome.
Jeff Weidner HTC Research Corp 925 313 9005 X 200 jeffweidnerlinkedin@gmail.com
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Great thread on this topic. I'll chime in as a firm that provides sourcing services from another emerging market, Argentina.
Time zones are aligned well with the US (1+ hr from EDT), strong English language skills, high levels of education, cultural familiarity/similarity, etc.
And yes, we do get on the phone, cold call past the gatekeeper, and headhunt. We've placed senior level executives in technology, HR, finance, etc. for F2000 companies.
We also have a diverse group of American expats, EU natives, LatAm natives, etc. so we can align cultures to cultures and languages to languages and have now worked jobs in 21 different countries for 120+ companies, 26 F2000.
Our CEO is from NY, was the co-founder and former CEO of HotJobs.com, moved to Buenos Aires and personally trains 12+ hours per week on cold-calling techniques, getting referrals, calling into the nursing desk and getting the names of the 5 nurses working the night shift, etc.
Finally, some of our best recruiters have been flown to the US by their clients to work on-site for them partly because the client wants their internal recruiters to learn from them.
I'd put our top recruiters up against some of the industry's best in the US without hesitation and, yes, they are a fraction of the cost of what you'd pay someone in the states for that caliber of skill.
Our customers can call their US based Project Manager with any issue they want, whenever they want.
Like any business, and especially a services business, getting here has taken time (4 years) - getting the infrastructure right, building the talent base and skills, etc. and it hasn't come without challenges. But the point is that is can be done and will continue to improve and increase the supply side of the equation as Josh pointed out.
So I strongly disagree with anyone who says certain recruiting tasks can't be done effectively from an emerging market because of language skills, cultural barriers, etc. Whatever country you may be sitting in, recruiting skills are recruiting skills and the phone is the phone.
Mike
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Good Morning at Sheila Greco Associates we have been doing Name Generation /Customized Research for 19 years, very successfully for our clients in the U.S. and Internationally. I really believe everyone has a tendency to over analyze the process. It is simple, our clients hire us to provide them quality passive candidates to fill their pipeline,to their time frame, budget,and target list. We in turn have our in-house research team do the research for an hourly rate or set fee. We then e-mail the client an excel formatted spreadsheet with the candidates, telephone number, location, company, notes,and email. The remainder of the process is up to the recruiter to source, we are providing a service for ways to fill your pipeline with qualified candidates quickly and accurately reducing the recruiters sourcing time by 40%.Making this process very cost and time effective. Please if anyone you like more information about any of our services contact me directly.
Mary Maines Vice President, Business Development Sheila Greco Associate, LLC 174 County Highway 67 Amsterdam, NY 12010 (518) 843-4611 Ext. 245 Email: marym@sheilagreco.com Visit us at www.sgaexecutivetracker.com / www.sheilagreco.com
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Josh,
Interesting points and your viewpoint is valid too. If Johny and Sandeep are given the same training, you would expect them to give you the same results.
But, the way I understand TNG - is that it is a process which requires a person to have deep understanding of the cultural aspects of the country you are sourcing into. I could be wrong, but I don't think I am. To give a training on the cultural aspects, I guess the time required to train the person (Sandeep more than Johny) would be higher and more complex. I spoke to a couple of people I know who do internet based sourcing and was trying to understand why they do not offer a TNG service to their clients. I got very vague responses.
Having said this, I know of a couple of small setups in India who are readying themselves to provide a TNG Service from India.
Someone in this discussion said that you cannot outsource TNG because gatekeepers will not understand the person on the other end, I politely disagree as there are plenty of people with good English language skills available (at least in India) who will be ready to this on at the right cost.
I also agree that the cost arbitrage is a factor that will help the emerging economies provide a many innovative services to the developed economies.
Cheers,
Vipul Agarwal Zend Consulting Services
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Jeff,
Yes, the price can get too low and not be worth it. Quality and time are two reasons why. Anyone can hand you a telephone book of names for cheap. However, it takes time to go through all of those names, and verify the titles and phone numbers. It is almost like cleaning your house before the maid gets there except in reverse. You have to resource all of those names.
This is why I do not charge per name, but instead by the hour. My sourcing is very targeted and I know that clients have made thousands of dollars from my sourcing. Does this bother me? No, because I am taking less risk on my side and I get paid for every hour I work.
Robin
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Jeff,
In the end, quality (accuracy) and timeliness are the most important parts of name-gen. So I would say that costs, due to competition, would decline until these deteriorate. Secondly, names are one thing, but competitive intelligence and industry knowledge are another. Good CI can help lower costs considerably by keeping the name-gen projects on the right track. I measured vendors for each of these and always had a real-time picture of who my low costs produces were, what type of projects they best handled and their added value.
One more note. I spoke to the owner of a large CPD company who said he was able to generate names for $8. They don�??t sell names, but rather deliver some packaged number of qualified and interested candidates (QIC's). 15 QIC�??s costs say $4500 or $300 each. His gross profit would be the difference between $300 - $8 dollars for the names and the costs incurred getting to the 15 QIC�??s. A sourcing group would do well to approach it this way. It essentially benchmarks a vendor�??s name-gen accuracy. Over time you will legitimately have a basis for determining the low cost producers. Throw in a factor for actionable CI or other extras and you've got a good basis for choosing your best vendors.
Patrick Higgins
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I don�??t know how low rates will go in this field. It�??s my understanding that many firms that have used India based research firms walks away unsatisfied with the experience. I cant speak for everyone in the business I have been involved with recruitment research for over ten years, not only do I deliver candidate pipelines I deliver market research, competitive intelligence and I help companies develop strategies, build sourcing libraries, etc. My rates are still higher than India based firms but lower than most US based firms. When I sell a service I am selling me, my experience and reputation. My clients have access to me anytime. If I am unable to give the client what they want, I find a way to make them happy. After all if my client is unhappy they will not use my services and I will be out of work.
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Vipul, I realized I could have put something better . . . and I probably should have!:
My observation is that U.S. based TNG training companies have, by their very nature, created SUPPLY in emerging economies (where $1 USD goes much farther than here in the U.S.) to meet the DEMAND.
The point of any company (yes, training companies included) is to create profit and shareholder value. Because of this, the more training you sell (not just here in the U.S., but worldwide), the more revenue and profit you create. Therefore, the more SUPPLY that is created in emerging economies through the training, the more the cost-per-name is degraded.
It's part of the reason that Wal-Mart hasn't seen a significant reduction in sales despite our current economic woes . . . even with ~90% of their products from China, Americans still go because the cost is lower than the alternatives.
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Vipul, I admit that I find your comment quite interesting that TNG "would remain largely a local activity." On one hand, you accredit a given individual for your understanding of the field, but then don't comment that their training has actually helped you "get around the gatekeepers." Maybe it's me, but isn't that the point of training in the first place? I deeply respect your comment and where you're coming from (and encourage it as I'm a huge fan of global business issues), however I don't follow the logic - training is designed to help you and your team enhance your performance, not just add to an overall theoretical understanding (in fact, that's the hit that many global business schools encounter - that the business courses are overly theoretical in nature).
Think about this for a minute - if BPO customer service offerings out of India have improved exponentially over the last few years, wouldn't the same be expected of TNG? Isn't it a natural progression to improve over time? What I'm suggesting is that the demand exists and you can capitalize on it . . . but you have to believe you can do it and then set the giant flywheel in motion. It's up to you - if the demand exists to cut expenses and offshore (as does in all elements of modern-day global business), you may be setting yourself up to lose if you chalk up an inability to compete based upon not understanding "American society" -- I can assure you that your global competitors (i.e. in Argentina, Vietnam, the Phillipines, etc.) would be very happy to hear your hesitation.
Many of my offshore TNG contacts claim to have learned gatekeeper tricks and ploys to get names from TNG training firms here in the U.S. In fact, it's the following convergence that has led to severe cost-per-name degradation in the market:
a. With COGS rising due to crude oil and the degradation of the U.S. Dollar (in addition to reduced B2B and consumer spending as a result), demand is tremendous to reduce costs within the supply chain.
b. Training firms, through the power of web e-commerce, are willing to sell to anyone in any economy if they're willing to pay the going price for the training. If 'Johnny' in the U.S. and 'Sandeep' in India go through the same training and employ the same tactics, however 'Johnny' charges $40 per name and 'Sandeep' charges $5 per name . . . who do you think will get the business more times than not?
What has resulted from all of this? It's simple - more Telephone Name Generators in emerging economies that are willing and able to support Recruiters for much lower cost.
Looking forward to your thoughts.
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Jeff Weidner @ HTC Research Corp wrote, "FYI I have yet to see an offshore Sourcing company offer phone based Name Generation. Why not, isn't the fact that they haven't offered phone Name Generation so far a testament to how easy Internet Name Generation is and how difficult Phone NG can be?"
Jeff your post on ERE caught my interest. As a 20+ year Corp Talent Acquisition Exec I found run-of-mill name gen virtually useless [regardless of the cost!] because it put the burden of the heavy lifting on my well-paid recruiters.
I decided years ago that I didn't MY recruiters cold-calling names on a list -- but rather spending their valuable and limited time interacting with their internal clients (hiring managers) and talking to and "really recruiting" top talent.
Thus grew the solution we now make available to corporate clients. Our solution is intended to improve the productivity of corporate recruiting operations and not burdening talented recruiters more grunt work!
And yes, we provide phone-based name verification and confirmation and much much more! Yes, it is difficult work but our clients find it valuable and effective. And it's offered at a price point that makes good business sense!
Louis P. Kadetsky, CPC Managing Director, KG America louis.kadetsky@kgamerica.com www.kgamerica.com
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I would say the reason that you haven't seen phone sourcing offered from over seas is that if someone tries cold calling into a company and you can't understand them they won't get too far.
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Jeff,
I'd like to add one point which I don't believe anyone has raised. Vipul added one very important cultural aspect, but the time difference is a huge gap. I believe few US sourcers are willing to work in the middle of the night, although a few industrious folks might be willing.
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Jeff,
Interesting thoughts. Let me preface my reply by saying that I have never worked as a sourcer or as an outsourced vendor. I am based in India and found your comments interesting about why offshore vendors do not provide Telephone Names Sourcing services.
My take is that it will be very difficult for any one to outsource Telephone Names generation (TNG) activity. As I understand the field (thanks to Maureen largely) TNG will require understanding about how the US society functions. Sitting in India I can train people to pickup the English Language and also ape the western accent (call centres etc) but I cannot teach them about how the (American) society functions and the ways to get around the gatekeepers.
I believe there would be some people who would offer TNG as a outsourced activity but it would remain largely a local activity.
Cheers,
Vipul Agarwal Zend Consulting Services vipul@zcsindia.com
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