Outsourcing human resource needs is the next big opportunity

Visitors to the German Pavilion during the 2010 Shanghai World Expo may well remember its two narrators, Jens and Yan Yan, who guided the tour on skateboards.

According to the plot, Jens, a male mechanics student at a German university, met female Chinese architect student Yan Yan in China.

Both actors, along with 200 other ad hoc workers for the pavilion, were actually not recruited by the sponsor, Koelnmesse International, but by FESCO Shanghai, a human resource joint venture with Swiss-firm Adecco.

"We received the outsourced task almost one year before the expo started, and the job didn't stop at recruitment," says Qiu Chunfeng, team leader of FESCO Shanghai.

Besides background checks, employee training, payroll administration and labor relations, Qiu and her team also helped the recruited German employees understand Chinese culture and regulations.

According to Luo Yunqing, manager of FESCO Adecco Management Consulting, FESCO Shanghai has over 1,000 clients, including Merzedes-Benz, Tesco, Nokia, Ikea, SAP, Michelin and Volvo. In 2010, the company reported a turnover of 3 billion yuan (326 million euros).

"Human resources outsourcing is much complicated than before," says Luo. HR personnel design test models to tell how competent the candidates will be for the job through IQ tests, capability tests and character tests to accurately find the right person for the job.

"Further, we also assess the enterprise closely to see whether there are repetitive procedures in the business chains to decide on employee attrition or increase," adds Luo.

Other major HR outsourcing companies in China include Manpower and Randstad. It is estimated by Yankee Group that the global HR outsourcing market is more than $80 billion.