HR Outsourcing (HRO): Its Impact on Your Company, Your Career, and the

HR Profession

AGENDA

What is HRWhat is OutsourcingCommonly outsourced HR servicesAdvantagesDisadvantagesFuture of HROImpact on HR profession

What is HR

HR is the set of individuals who make up the workforce of an organization, business sector, or economy.

Likewise, other terms sometimes used include "manpower", "talent", "labour", or simply "people".

What is Outsourcing

The performance by outside parties on a recurring basis, of tasks that would otherwise be performed in-house. Outsourcing includes both foreign and domestic contracting.

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Types of Outsourcing

Business Process Outsourcing. Information Technology. Human Resources. Sales and Marketing. Finance. Administrative. All others.

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Other Sourcing benefits

Access to outside HR expertise. Greater diversity of HR services. Upgrade level of customer service. Ease time pressure demands. “ Better , faster , cheaper”.

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Advantages of Outsourcing

Allow HR to focus on core competencies. Creates strategic opportunities for HR

professionals. Improve quality, effectiveness and efficiency. Relief from administrative burdens. Reduce operating costs.

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Disadvantages of Outsourcing

Over promise and under deliver. Information leaks. Loss of institutional knowledge. Non performance of key function. Lack of fit with company’s culture. Organisational resistance.

Future of Outsourcing

Growth-Maturation of HRO market Increasing weight of non-cost drivers “Commodization” of HR functions New roles for internal HR departments New career opportunities for HR

professionals Expansion of small/mid-sized HRO markets

The Future of Outsourcing (cont’d)

Demographic changes Improved HRO metrics Reshaping of industry

Impact on HR Profession

Internal HR at significant disadvantage in cost per transaction

Loss of control of key processes Enhanced credibility Strategic focus Decentralized structure Internal politics – HR as business partner Move to customer service culture

Impact on HR Profession (cont’d)

Management and Organizational Development – big picture view

New roles – consultant and HR strategist Develop competencies to remain valuable HR is exposed and more visible as

organizational function HR is far more measurable Align HR strategy with corporate goals

Points to be considered

Financial stability Proven service track record Local market presence Flexibility in service offering The background

Outsourcing Myths

Outsourcing is just a fad Outsourcing can be kept secret from

employees Outsourcing is only for largest companies Outsourcing is for every one Messes must be fixed before outsourcing

Question ?