Tuesday, 29 June 2010

Adidas announce strategic U-turn on recruitment outsourcing

When Brazilian striker Luís Fabiano commented: "It’s supernatural! All of a sudden it changes trajectory on you!” he was speaking of the Adidas Jubulani football.

He might, however, have been speaking of the HR Strategy of the Adidas Group, who have just announced that they are reversing their earlier strategy of outsourcing recruitment, and have decided to bring the activity back in-house and in doing so save up to almost £5m in headhunter and advertising costs.

Adidas moves recruitment in-house to save €6m a year

Isn’t it fascinating and ironic that the alleged benefits of the majority of outsourcing initiatives are cost reduction and improved service delivery but, almost without exception, whenever an organisation elects to “insource” an activity it is for exactly the same reason!

A quick browse through one of the most popular HR textbooks will reveal comments such as:
Outsourcing appears to encourage the measurement of the value of HR and it is suggested that this comes about through the need for service-level agreements and key performance indicators with a greater focus on customer satisfaction.

Outsourcing allows the internal HR function to concentrate on driving the direction of HR rather than carry out more mundane tasks.
Certainly in the case of Adidas, reducing costs and improving processes are specifically quoted as reasons for this major decision.

Where cost is uppermost, it’s not always HR that is calling the tune. As the sadly-departed Marcia Roberts (former Chief Executive of the Recruitment and Employment Confederation) warned:
As a potential outsourcing agency for recruitment, you often find yourself replying to tenders and dealing not with HR but with the purchasing department – which is more likely to be concentrating on cost.
Alarms bells will clearly be ringing in a number of providers of outsourced recruitment services, but internal HR functions should also be checking their internal capability to manage the implications of similar U-turns on the issue of who manages recruitment.

Further reading: Another U-turn on HR outsourcing


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