I wound up running into a conversation on ERE today that looked pretty interesting. It's from a really smart guy, Jeff Weidner, who I respect greatly and see as a key contributor to the future of value-added strategic sourcing thought leadership
as we move forward. "How low can the cost of a name get?
As I often say, I'm really happy to have seen RBC grow as I don't post too much on ERE nowadays as I question the site's objectivity, propensity to allow members to be publicly blackballed, and the fact that I too often see people's ideas pulled from a post and then winding up in a 'feature article' shortly thereafter . . . however there are some really cool people on there that I like to interact with and share ideas with. I think of it like going to a dingy, old, run-down pool hall that you wouldn't otherwise go to except for the fact that you know some cool people that head over there sometimes.
The above post is one of those times. So, getting to what I'd like to share and get your thoughts on, it's the following highlights:
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.
In our case, it's removing inneficiencies and excessive costs from the recruiting process.
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 TNG (telephonic name gen) 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 (at at least the first shot) 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. 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 U.S. 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.
So . . . what do you think?
LG & Assoc Search / Talent Strategy