Practical Approaches to Human Resources Outsourcing
HRO (Human Resources Outsourcing) is not a new trend. It has been practiced for a while now and there are many lessons that have been learned as companies implemented outsourcing programs. The usual business reasons for outsourcing have been a focus on improving service and reducing costs by engaging providers to manage the administrative business processes, infrastructure systems and customer service. The lowest hanging fruit of these programs usually addresses saving money by increasing operational efficiencies by leveraging technology and a provider’s operational capabilities.
Many firms have saved lots of money and improved efficiency of HR services by outsourcing. In effect these programs “picked up the operation of HR departments” and “dropped” them into a provider’s service delivery framework. This “lift and shift” approach is usually effective saving money and usually falls very short of many executives other action items-adding additional “business value” to HR.
If HRO initiatives are to be successful in adding real business value, a case can be made that HRO can be a catalyst for that transformation if it is part of a broader HR strategy. Of course, this requires lots of planning and setting realistic expectations.
Let’s take a look at some performance objectives that are common:
HR Efficiency Improvements :
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Reduce overall HR costs
Improve efficiency of HR admin
Reduce manual processing
Reduce capital investments in HR
Make fixed costs variable
Improve complianc
HR Strategy Transformation :
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Proactive workforce planning and talent management
HR programs that motivate performance and retain top talent
Metrics and analytics that improve ROI on talent
Cultural and organizational change that meet business and people needs
When planned, communicated and implemented properly, HRO initiatives set their sights from the start on process standardization and improved service delivery and their (HR’s) customers report higher overall satisfaction with HR services from these service delivery changes. Once the HRO program is running smoothly, focusing on designing a new HR Model aligned with Business Goals. This could include developing Centers of Excellence within the HR function to focus on diverse business needs across policy, programs, communications, workforce planning and decision-support.