Cloud cover is a benefit to recruitment

14 April 2010

Clouding, software-as-a-service (SaaS) and virtual machines all sound very futuristic but the reality is their presence in a recruitment business’s life is much closer than we dare to think.

However, with the effective application of these new tools, recruitment agencies will see a real reduction in operation costs over the next decade.

Technology has always driven change in our society and will continue to do so at what sometimes seems like an alarming pace. We live in an information-rich age and our working practices and societal behaviour reflect that. All that will continue to gather pace over the next decade as incremental becomes exponential change.

Quickening pace
We are already seeing this pace quickening through cloud computing, a concept based on the idea that a network of computers can collectively share data and software rather than individually. The idea is an old one, but is now being used on a larger scale to deliver efficiencies in the workplace. Such sharing includes SaaS, allowing access to remote copies of software so that users can process data remotely.

Users will pay an external supplier (eg ’Recruitment Data Providers plc’), who will then provide access to software which is required, as and when needed, at a charge. Therefore, businesses will no longer have to spend large sums of money on capital infrastructure such as servers: instead, this cost will be classed as operational expenditure and will lower start-up costs. Gone now are the days of buying a payroll, candidate or time sheet software package!

Without a server room, office space can used more effectively and when coupled with remote working, a business’s operational costs can be dramatically reduced. In fact, outsourced back office processing is likely to become cheaper and even ’private clouds’.

There are many benefits to these new technology models: clouds and SaaS models use less computing capacity than traditional methods, saving energy and reducing bills.

Less maintenance and upgrading work means human resources within the IT function can be reduced, enabling the existing workforce - already increasingly contractor-based - to become truly flexible.

Mergers and acquisitions will become less of a headache as systems can be integrated more rapidly on the cloud. Software becomes a more variable cost with lower running expenses when updates are provided automatically and users pay by subscription.

Barriers to this predicted expansion could be caused by inertia and economic constraints post-recession. Other limiting factors could include increased security threats; however, these could be reduced through changes in data storage. SaaS could be limited to SMEs because of the perceived real costs involved, while larger organisations will simply run their own private clouds, thus reducing both risk and cost.

As the cloud computing trend spreads, there will be more opportunities to compete on business process and capability, rather than ownership of assets such as hardware and software. The trend will also allow smaller organisations to compete with large enterprises more effectively.

As the cloud computing trend spreads, there will be more opportunities to compete on business process and capability, rather than ownership of assets such as hardware and software.

Many believe that business models will shift through technology spend going on software and applications rather than hardware.

Financially, it will be possible to operate on a ’pay as you go’ basis, freeing up capital for other types of investment, including training to ensure recruiters are always up to date on the latest in their industry.

Technological future
So as recruitment consultants, what changes can we expect in the next decade? The answer is exciting changes as Web 2.0 has already started to make its mark in the sector with social media channels now being used alongside traditional sources.

Recruitment firms can also maintain their service to clients and candidates while reducing their operating costs because while turnover will stay the same, profits will rise, especially for SMEs, turning them into true niche players.

With history as a guide, we can see that individuals and companies that know about, utilise and harness new trends are better placed for future success. Nowhere is this more important than in the recruitment industry, where margins are constantly being squeezed and a business’s quick reflexes can make the difference between placing a candidate or not.

The biggest plus in the cloud computing trend will be to enable organisations to operate remote and mobile teams so that individual staff can choose more self-managed work styles. A larger part of the UK workforce than ever before could find itself freed from fixed workplace locations while at the same time, be totally accessible 24/7 wherever they are.

The traditional nine-to-five, Working Time Directive world is all set to change.

Powerpoints
Virtual change - Cloud computing is a based on the idea that a network of computers can share data and software rather than functioning individually
Cost benefits - The new technology uses less computing capacity than traditional methods, saving energy and reducing bills. Less maintenance and upgrading work means less work for the IT function
Easier integration - Mergers and acquisitions will be easier to manage as systems can be integrated more rapidly on the cloud