As businesses look at their HR provision, they will be reminded of how it has become increasingly complex and reliant on specialist capabilities. Frances Molloy, Chief Executive of Health@Work, weighs up the pros and cons of outsourcing this increasingly complex employer service provision.
The recent economic climate has made companies more determined to ensure return on investment through their employee base. Subsequently, this is putting more pressure on organisation's HR functions to ensure staff development, retention and to encourage premium performance. Given the countless specialists areas within human resources management, which seem to be multiplying as new techniques emerge; it's virtually impossible for a generalist HR professional or a small HR team to provide specialist skills and knowledge in all areas. In order to provide knowledge outside of the HR generalist's responsibilities, more organisations are outsourcing to external suppliers. Such HR outsourcing arrangements will vary from organisation to organisation, with some outsourcing virtually all of their HR processes, while others will just select specific components, such as payroll or recruitment, etc.
Increasingly, organisations are seeking specialist providers which have well-practiced and proven programmes, rather than experimenting with, investing and developing their own techniques. In this way, they can feel confident that procedures will be implemented correctly and effectively the first time around. In most cases, this type of specialist outsourcing can be more cost effective, with speedy and accurate implementation, saving time and resources. It can also be cheaper than sending employees for specific training courses or hiring additional members of HR staff. Unlike sending HR staff on training courses, external HR support providers can come in to organisations and provide bespoke consultancy services and training that is tailored to the individual business' structure and HR requirements. For many organisations it can also be beneficial to gain the insights of an external individual or organisation, as they can provide impartial opinions and constructive non-biased advice. This is an ideal situation for when auditing the systems and procedures of any business.
Outsourcing is by no means a form of weakness in an organisation's internal structure, but instead reflects their commitment to maintaining high levels of workforce development and investment, which includes protecting their employee's physical and mental wellbeing. There is, however, a growing concern that organisations who frequently outsource will, as a result, invest less in their internal HR workforce, providing less training to enhance and maintain their knowledge and skills, etc. This certainly should not be the case. In most cases, training of HR personnel goes hand-in-hand with the implementation of HR initiatives and strategies, as even those organisations outsourcing a number of their HR functions will still require a well-informed HR professional or team to maintain and manage their HR procedures in the long-term. Internal HR staff will need to have sufficient understanding of each HR function, such as workplace wellbeing, whether it's sourced internally or externally, to allow them to effectively assess the needs of their organisation, and enable them to engage effectively with the external agencies. To get the most from the alliance, an organisation's HR team will require skills that enable them to best select, source and contract with external suppliers, making the partnership as effective as possible. Ideally there should be a balance between the internal and external HR programmes and management. Particularly for large employers, having the essential day-to-day HR managed internally can be a huge benefit, as they will have a strong understanding of the organisation's people, culture, systems and structure. They will also have the ability to respond quickly concerning day-to-day matters and common HR responsibilities, like recruitment, appraisals, grievances, and training needs analysis, etc. One consideration when selecting an outsourcing provider should be the provision of a range of training courses for client organisations to improve their long-term management capacity in such areas as health & safety and employee wellbeing, and to aid the HR department in the implementation of new HR strategies and programmes.