The Coming Age of Outsourcing

In many people’s minds HR Outsourcing was a child of the late 80s, born of parents who, as any parents would, believed their offspring capable of pushing the boundaries and shifting the business paradigm. After underachieving in adolescence, the child is soon to come of age. So as we cross into the 2nd decade of the 3rd millennium, what does the business world now demand of HR Outsourcing as it steps forth into adulthood?

The opportunities are huge since the business world has a very demanding HR agenda. One that, by necessity, has been construed in a highly dynamic, highly pressurised, two-pronged context: Be Global and Be Efficient. With such imperatives businesses need strong, innovative partners in order to survive and be successful.

Firstly: Be Global

With fewer trade and currency restrictions; with access to a fast global internet; with convergence of commercial language, the world is a 24x7 marketplace.

To support this revolution HR Outsourcing needs to change. Both the tools and the service models need to be scoped anew and redefined. Tools need to be global: a single HR database covering all countries and all HR domains, including modules supporting business strategy in key areas like talent management, and the ability to deploy a single HR governance model across all geographies. As such the tools must be built to meet the specific challenges of the 2nd decade.

Yet service delivery must have a significant local dimension. Services must be delivered locally, in local language and by staff with a deep expertise in all of the impacting local legislation. Business may have gone global, but government has not. 
 

Then, Be Efficient

The commercial pressures have always been a de facto business imperative, and indeed potential costs savings were at the very heart of the original business case arguments for HR Outsourcing. However HR outsourcing has not yet delivered on all fronts, indeed as a model it has underperformed. For example, administration costs have often remained in place even after outsourcing and the promised continuous innovation and improvement has often not been delivered.

So in order to add significant value and to help drive down the total HR costs of their clients, the modern day outsourcer must deliver something far beyond lift and shift. This again puts the focus onto tools, processes and services. Of course a single, global HR database is a huge asset as it eliminates the costs associated with disparate systems. E.g.integration of data; the preparation of consolidated intelligence. However, beyond this is the actual functional and business content provided by the outsourcer.

From a functional standpoint we mean the breadth and depth of the coverage provided. Without a vision to cover the entire HR domain there will remain pockets needing either a special, separate application or manual intervention, both of which carry inefficiency. Then within each domain is the depth of what is provided. The need today is to move far beyond the maintenance of online HR records. Each domain needs to be intuitive, pre-emptive, informative, timely and efficient, and to provide all users with all the relevant information and process right at their fingertips.

From the business content perspective consideration must be given to the range of “services” provided to HR professionals, employees and line managers in the HR portal. The range of topics available scopes the true extent to the potential savings available with the service. Any HR events not fully supported by the portal will require manual intervention. The mindset here is to view the totality of HR, and not just the obvious, narrow band of transactions that tended to be the scope of early generations of “employee self service” solutions. However, the existence of such rich, standardized, business-strength content is only one measure. The second, and arguably the more potent, is the capability of the provider to configure their solution to exactly meet unique and specific needs, and to do so without resorting to customisation. That’s the killer USP. 

In conclusion 
 
HR Outsourcing is coming of age and the global community has set a tough agenda in order for it to be accepted as a mature business tool. Yet the real innovators in HR are already delivering leading edge technologies and services to meet this agenda, they are already rising to the challenge of providing the necessary international reach, and they have already aligned their philosophy to the deeper commitment required to add tangible and lasting value. Such quality HR Outsourcers are truly enabling their clients to Be Global and Be Efficient.