The reason: With so few jobs available, every open position elicits a flood of applications — from qualified, under-qualified and over-qualified candidates. Third-party providers can help companies sort through the piles to find the best employees.

Same goes for recruiting software, which can help companies organize the applicant pool.

Also, experts say now’s a good time — for companies that can afford to spend — to stockpile talent at low cost to prepare for the future, or identify potential recruits for hiring once the economy picks up.

Of course, many companies can’t afford any new spending right now and aren’t hiring very much in the first place.

What about your company? Have you considered changes to your budget for third-party recruiters or recruiting technology? Let us know in the comments section below.

There are three important stages in the decision-making process, says technology consultant Naomi Lee Bloom:

1. Figure out what you really need – Companies don’t all have the same goals when they decide to outsource — just as outsourcing providers don’t all provide the same things. Before even talking to vendors, you need to decide what the company’s objectives are.
2. Investigate – Key things you want to know about potential providers include: who their clients are (Do they specialize in one industry? Do they serve companies of your size?), turnover at the top (If leaders seem to leave often, that’s not a good sign), and language skills (for providers located offshore).
3. Consider the timing – Not only do companies need to consider whether outsourcing makes sense now, but also whether it will still make sense down the road. Pick a provider who’ll be able to accommodate your planned growth.

For the most part, the answer is yes. Among the HR departments that outsource, 90% are satisfied with the services provided by the outsourcing vendor, according to a recent poll by the Society for Human Resource Management.

Moreover, about one third of companies plan to increase their HR outsourcing next year, while just 17% plan to decrease.

The key to success: outsourcing only in appropriate areas. Companies get the most out of the arrangement when it’s used for paperwork-intensive administrative tasks, like managing benefits and administering 401(k) plans.

Less satisfaction is found in areas that require in-depth knowledge of a company’s culture, such as recruiting, training and employee development.

At the companies planning to get more outside help, the areas most likely to be outsourced are:

• background and criminal record checks (65%)
• flexible spending account (FSA) administration (52%)
• health benefits administration (46%), and
• payroll (34%).

The key question: Does outsourcing help companies save money?

Maybe. Just under half (49%) of the companies surveyed said they’d cut costs as a direct result of outsourcing. On the other hand, 28% said costs had increased, while the rest said they’ve remained the same.

Yep, that’s the kinder, gentler world of corporate IT at its finest. According to a story in The Day, a New London, CN, newspaper, the leaders of one of the largest, most profitable U.S. pharma companies are bringing IT workers from India to the United States on H1B visas and having their soon-to-be downsized staffers train their replacements.

Kind of like being asked to dig your own grave and then jump into it.

Most of Pfizer’s U.S. IT workers are contractors who work at the company’s Connecticut facilities. The company circulated an internal memo in 2005 saying it wanted to cut $4 billion from its annual operating costs by 2008, mostly by moving IT and other operations from the United States and Europe to countries with lower costs of living.

The patents on a number of Pfizer drugs will expire in coming years, meaning that generics for those drugs will hit the market and Pfizer’s rather large pocketbook. Industry watchers believe this is the reason Pfizer’s taking early steps to cut its costs and their outsourcing is part of a plan to keep stockholders from abandoning the company.

U.S. Sen. Chris Dodd, D-Conn., and U.S. Rep. Joe Courtney, D-Conn., who represent the region, are reported to have sent a letter to Pfizer asking the company to re-think laying off U.S.-based workers in Connecticut.

No word yet on the company’s response to Dodd and Courtney’s requests, but let’s just imagine what it’ll be.

You Pfizer IT folks: Keep on digging.

So readers, what’s your take on this cost saving IT move?

Here are five signs that it might be worth a try:

1. Deadlines are missed– If employees aren’t getting critical documents — like W-2s, paychecks, health care information, etc. — on time, it might be a good idea to have an outside provider perform some of those administrative tasks.
2. Recruiting doesn’t get enough focus — One of the benefits of outsourcing is that it lets HR pros use their talents in ways that really benefit the company, like finding and hiring the best talent.
3. HR staffers are angry — No one likes to work in a department that can’t get all its work done. If that describes your team, you could have a big retention problem soon.
4. Employee relations are suffering — Again, administrative work often gets in the way of what HR is really there for — keeping employees happy and productive.
5. Everyone’s on the same page about what to outsource — Companies often report less than satisfactory results when outsiders handle critical functions like recruiting and training and development. That’s why its important for HR and top brass to come up with a plan that lets HR remain a strategic partner within the company.

A few big, India-based tech outsourcing firms have started or are going to start going after the HR market. (Read more here).

Of course there are some disadvantages to handing HR over to an offshore firm. Many of them are magnifications of the disadvantages to outsourcing in general. Unlike IT, handling HR duties requires a good understanding of an organization’s culture. Also, many companies are wary of letting offshore firms handle employees’ personal data.

Then, of course, there are the legal concerns that are central to HR’s role. American employment laws are tough to understand even for many people in this country, not to mention someone on a different continent.

One thing this means for small and medium companies is it may drive prices down for HR outsourcing in general. Many domestic outsourcing firms are already going after the mid-market. Indian firms can offer services for relatively cheap, and if they start to make waves over here, prices across the board may fall, giving mid-sized companies even more options if they want to outsource.