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Should You Outsource Some HR Functions? |
"HR Outsourcing Marketplace: Key
Trends and Competitors Shaping the HR Space," a recent study by
IDC, a research consultancy in Framingham, Mass., reports that
many companies outsource key human-resource functions - in part
due to new technologies, globalization strategies, and a lack of
skilled employees. Should you?
It found that mission-critical activities - those dealing with
corporate culture and the acquisition and retention of talent -
were outsourced less often than the more mundane administration
tasks such as payroll and benefits administration which can
often take away from HR's ability to concentrate on more
critical tasks.
The Norton Group in Columbia, South Carolina, finds that many of
the activities outsourced are:
Retirement and benefit plan administration
Relocation services
Employee Handbooks
Policy and procedure development
Safety audits
Surveys
The Effects of Outsourcing
When considering whether to outsource, several questions come
into play. But, once answered, it can be determined that
outsourcing brings big savings - in both time and money. However,
it is not without its risks.
Risks of Outsourcing
Once any company activity is handed off to an outsider, there
are risks. Maybe too many jobs will be parceled out, creating a
lack of cohesion in the organization. Perhaps the job won't be
finished, and an already-burdened employee will be left with
finishing it up. Perhaps the work will be botched. Or, maybe the
contractor will later claim employee status.
Clearly, who one decides to outsource to matters. Just as
potential recruits are screened, so too should be potential
outsourcers. Matters to consider include:
Understanding all the functions of HR and determining which
activitie are to be outsourced
Knowing what it currently costs you to accomplish the tasks you
now want to outsource
Understanding vendor offerings
Evaluating vendor responsiveness
Determining whether the vendor can complement your in-house
efforts
Establishing a way in which to measure vendor effectiveness and
performance
The Benefits of Outsourcing
While outsourcing may benefit individual organization's in
different ways, many who have used an outsourcer cite the
following as major benefits:
Lower cost. A company who outsources pays the outsourcer no
benefits. There's also no need to pay for downtime -that period
of time when an employee may still be on the payroll but not
really need to be doing what he or she was hired for.
Access to specialized expertise. Organizations - and the
regulations they face - become increasingly complex. Hiring all
the specialists you need in house is costly. Outsourcing to a
specialist for particular activities gives the expertise you
need at a fraction of the cost.
Flexibility. Outsource only what you choose and when you need.
This helps meet fluctuating demands.
Less busy work. Much time is consumed in the HR department on
the management and administration of routine records and
administration. This diverts energies from recruiting and
retention and corporate culture building. It also enables HR
executives to add value by taking a more strategic role in the
organization.
Objectivity. Because a third-party is now involved, information
may be more objective than if done by in-house staff.
Outsourcing Potential
Outsourcers come in all sizes. You may find an individual able
to handle your needs. But, many organizations prefer to go with
companies who specialize in particular HR areas. And, as
technology becomes a major factor in many companies, the way on
which your outsourcer provides services matters. As David
Coursey, executive editor of ZDNet's AnchorDesk notes, "We have
left the Windows era for the Internet era… The implications of
this are enormous… but it's Internet-based software… that [is]
driving the industry." |
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JENNIFER
HICKS /
www.Ecruiter.com |
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