That was the challenge Visteon Corporation faced right before Ford spun off the automobile parts manufacturer in June 2000. “How were we going to handle this large hiring effort cost-effectively since we were starting from scratch?” recalls Carolyn Rice, Staffing and Recruiting Manager.
Visteon had another hiring challenge: it no longer belonged to one of the hallowed names in automobile manufacturing. “In Detroit, there is the Big Three rule. It was going to be a hard sell getting people to work for a brand new spin-off that wasn’t part of the Big Three,” explains Rice.
Visteon looked at how Ford handled staffing and decided to do things differently. Hiring at Ford was decentralized. Rice says different recruiters would run into each other’s job searches because there was no centralized tracking system for all applicants. In addition, there was no continuity in salary offers or background and drug tests.
The first decision: Visteon wanted to centralize the hiring process. Executives completed a cost-benefit analysis of what it would cost to do this in-house. “Our HR people were coming from Ford and just didn’t have the skill set to recruit. How were we going to hire and train the recruiters we needed immediately? They would be responsible for immediately hiring 1000 people,” Rice says.
Realizing its specialty was manufacturing cooling systems, instrument panels, and electronics like entertainment and GPS systems, Visteon executives turned to Plan B: outsourcing some or all of the recruiting process. “We didn’t want a large reliance on headhunters because they take 30 percent of the first-year salary and that was cost-prohibitive. And since we anticipated having trouble recruiting people, we needed experienced recruiters to sell our company,” says Rice.
Initially, Visteon looked only at cost, time to hire, and recruiting expertise when preparing a list of possible suppliers. But its executives realized they needed flexibility, too. “At the outset we were hiring a lot of people. But we weren’t sure what our model would be. We had no idea what our attrition rate would be. Last year we hired 800 people but this year we only hired 100. So we needed flexibility,” Rice explains.
Visteon’s start-up nature created another challenge. “We were developing our history as we went. We needed a partner who could tolerate a lot of ambiguity since we were a new company,” says Rice.
The road led to only one destination: outsourcing to a recruitment process outsourcer (RPO).
Visteon issued an RFP. “Many companies who answered had solid HR processes. But it seemed like they would take a lot of time. We didn’t have time; we couldn’t wait eight months to hire our staff,” recalls Rice.
Supplier selection came down to two companies. Visteon selected Manpower Business Solutions because its executives “had the attitude that this was an adventure. They were willing to hop on and figure it out together. Their attitude of ‘we love the challenge’ came across in their presentation,” says Rice.
“Visteon was trying to figure out how to put one foot in front of the other,” says Sheldon Schur, Vice President and General Manager for Manpower Business Solutions. “It was like starting with a white board. We helped them to create order from chaos.”
In addition, Visteon “didn’t feel boxed in by Manpower’s contract.” Rice says the RPO executives told her, “If we didn’t scope it out in the contract, we’ll work through it.” That impressed the manufacturer because the other RPO companies “were very scripted and didn’t want to deviate from certain things. One company said, ‘You guys figure it out. When you know what you want us to do, tell us,'” she says.
Visteon outsourced the entire recruitment process, which includes:
- Designing the process
- Requisiting meetings with hiring managers
- Sourcing talent
- Interviewing candidates
- Managing internal hires as employees change jobs
- Extending offers
- On-boarding new hires
- Off-boarding employees when their positions are eliminated
- Centralizing the exit process
Selecting Manpower Business Solutions turned out to be the right choice. “They were truly a partner in helping figure things out,” says Rice.
The day after the spin-off
Rice says the day after the spin-off was “chaos.” Ford delivered boxes of files with candidates in progress. Some files said “we made a commitment to hire this person.”
Manpower Business Solutions’s people arrived on site three weeks after the spin-off. Their first challenge: they called every person in the candidate box to figure out if they were going to work for Visteon.
Visteon’s three HR people were slammed. Rice says they had been with Ford 30 years and were used to working with a headhunter. “Working with an outsourcer was a huge cultural shift. They didn’t trust Manpower could find the people quick enough. They said, ‘I can call George and have someone here in two weeks,'” Rice says. She had to explain that the recruiters didn’t have to pay the headhunter fee because now all fees came from a centralized HR budget.
The first year was “rough.” Rice says Manpower staffers “had to prove themselves over and over again. They would prove themselves with one function and then another function would fight back. Some would even hire their own people and not use Manpower. We would discover this when the employee started! They didn’t live by our new rules; they were just doing what they had always done,” she notes.
Eventually Manpower Business Solutions won everyone over. First, Visteon’s leadership “made it clear they expected commitment to the new HR model,” she says. Success in one group won over resistance from the next group. Manpower’s performance also melted resistance. “We got buy-in from our managers because they could see Manpower was sending them better candidates than they received before,” says Rice. Over time, with executive sponsorship and a rigorous change management effort, the success of the program spoke for itself.
The first year Visteon had to hire 1,000 people. The second year it had to downsize. Last year the pendulum swung back and the manufacturer had to do “an enormous amount of hiring.”
The volatility in the automotive industry means continued HR volatility. Rice says Visteon worked with its supplier “to reengineer the pricing model to accommodate the hiring swings.” Being amenable to pricing change “was the first true testament that this would be a mutually beneficial relationship,” she says.
Recruitment process outsourcers can accommodate peaks and valleys in their buyer’s life cycle. “We built our delivery model to be flexible and scalable,” says Schur.
Initially Visteon outsourced recruiting for its engineering staff. Next it assigned Manpower the staffing of its manufacturing plants. “We had the whole resistance thing all over again. This time we had the experience and knew what level of change management to do,” says Rice. Visteon had Manpower do road shows and teach the plants how to use the HRIS system.
Currently Visteon has Manpower working on a pilot in Mexico. Some of the plant managers are transplants from Detroit, who had already seen Manpower in action. “But the Mexican managers weren’t too sure about this. We did interviewing blitzes and hired people quickly, much quicker than they are used to. So Manpower had to prove itself again,” says Rice. This time around, Manpower personnel said to the Mexican managers, “I understand your trepidation and know where you are coming from. Don’t take our word. Let me prove how this is going to be valuable to you,” reports Rice.
Visteon has specific metrics it reviews quarterly. Rice meets weekly with the recruiting and site manager to talk through issues and discuss Visteon’s current plans. She gets weekly reports on how many days all jobs are open, which allows her to measure the effectiveness of Manpower’s recruiting program.
She also gets feedback from peers and from the HR managers for each product group at each plant.
Today she says “most of this is on automatic pilot. The true measure of success is I don’t have to get involved.”
Rice says the two partners talk through things “looking at the big picture.” To date there hasn’t been anything that “we couldn’t work out. No one feels they have lost or won. Even the most contentious issues do not result in an adverse exchange.”
Schur says RPOs know how to ferret out candidates in a changing world of work. “Today there is a war on talent. You used to be able to run an ad on Monster.com and find a quality candidate. No more.” Manpower targets passive candidates using a multi-tiered sourcing strategy. This includes a combination of grass roots, direct sourcing, associations, common and specialty boards, advertising, and career fairs.
Staffing a new company was a major benefit in itself. And the RPO metrics greatly improved. Time to hire is now under 30 days, a 50 percent reduction, “which has a direct benefit to our productivity,” says Rice.
Visteon now has 100 percent compliance with its HR business processes, like drug screening and background checks. “We didn’t have that in the past,” says Rice.
Reliance on search firms has fallen drastically and so have the associated fees. Over the past four years, more than 97 percent of the new hires have come from Manpower Business Solutions, not search firms.
Rice says applicant tracking was “very difficult before” because Ford did it differently at every location. “They used Excel spreadsheets; we weren’t sure we were getting the big picture. We need to keep track of this because of government regulations. The new system fixed all of these issues,” she says.
Manpower is helping Visteon grow. “We are shifting some of our resources to lower-cost countries,” Rice explains. The manufacturer opened a technical center for its climate group in Juarez, Mexico. “Our HR people couldn’t hire fast enough. We asked Manpower for help,” she reports. Manpower also provided intelligence on the Czech Republic, another possible Visteon location.
One of the manufacturer’s strategic goals is to retain the best employees it can. This can be tricky, because some parts of its business are growing while other parts face shrinking volumes. Rice says Manpower is helping the manufacturer manage a people placement process.
Manpower takes the people Visteon doesn’t want to lose, but can’t use, and matches them against open positions. “Sometimes we’ll displace an agency person to keep this employee because we value their knowledge of the organization. This is a cultural change from our past, which they are managing for us; it’s counter-intuitive to how we handled things in the past,” explains Rice.
Manpower also manages the termination desk, which collects badges and laptops when employees leave. It helps employees in transition, including teaching them how to write a resume.
Visteon’s new internal mobility program gives employees an opportunity to take control of their careers. Today, the company fills internally a majority of positions. Manpower visits Visteon’s out-of-state plants twice a year. Visteon employees tell Manpower how they think the outsourcer can make the process better. “Manpower is good at taking on suggestions to create continuous improvement,” says Rice.
Last but not least are the savings. Rice says outsourcing has reduced Visteon’s cost-per-hire by 75 percent because it cut Ford’s reliance on headhunters. Manpower gave the manufacturer another 10 percent reduction in its last contract negotiation, Rice reports. The life of the program should save Visteon $25 million.
Reasons for success
Rice says Manpower “puts a face to the HR process.” Visteon managers know their Manpower staffer is “their partner in the process.”
Manpower employees have “become part of our culture. I get e-mails from my colleagues who said, ‘My HR person did this.’ They are talking about the Manpower employee. They think he’s part of Visteon,” says Rice. Manpower employees work at the Visteon locations, so many employees don’t realize the manufacturer outsourced this function.
Rice points out that Visteon outsources other processes but employees would rarely assume the employees from those suppliers were Visteon staffers.
The importance of partnership
Rice views this relationship as a partnership. “Instead of defining the relationship by the contract, they do what’s best for us and our new hires. There have been several instances where we had a need, and they provided a service before we finalized the pricing and contract amendments. There is a level of trust that eventually both parties will come to mutually beneficial terms. They realize service is first and foremost,” explains the Visteon executive.
Partnership also means the supplier is “ready to step in when needed.” Visteon had to hire a large number of agency employees to be on site in two days. Since it only uses Manpower to find salaried employees, it gave the assignment to another HR supplier. Visteon wasn’t getting the results it needed and complained. “They told us, ‘We’re doing the best we can. We can’t find the people,'” says Rice.
Who ya gonna call? She went to Manpower’s on-site manager and asked her if she could call corporate to solve the staffing problem. Manpower found those 100 people in two days.
“This wasn’t in scope, but our Manpower exec used her power as a VP to tell them, ‘Visteon needs help. Can we step in?’ She wanted to make this work because she wanted to protect the relationship and keep us happy. They are up for every challenge we throw at them,” says Rice.
What’s the state of outsourcing today? “The employees who were our biggest enemies in the beginning are our biggest advocates today,” reports the Visteon exec.
Lessons from the Outsourcing Journal:
- Spin-offs have the challenge of creating processes from the outset. Visteon used a recruitment process outsourcer to hire employees quickly as well as set up centralized HR processes.
- Buyers feel a sense of partnership when suppliers go out of the way to solve their business problems.
- Changing behavior is tough. Rigorous change management and a centralized HRIS system help drive results. Ultimately, results win over hearts.
- Outsourcing can help companies grow and change strategy, allowing companies to focus on core competencies.