It comes to something when even the New York Times is asking ‘what happened to the Human Resources department’? Are we really so distant, so far down the outsourcing route that we’ve turned into an 0800 number? It appears so. Increasing numbers of people think that HR is a web portal for filling in holiday forms.

On the one hand, this proves that we’ve succeeded in outsourcing our core activities and we’ve got uptake. On the other hand, it implies that we’re not taking advantage of what we’re really good at – talking. Further than that, it also implies that we’re not really adding value, and that’s the most serious implication here. When we outsourced, the intention was to add value – to allow the internal HR function to become more strategic and people-focused.

The growth of outsourcing, and why it happened

Industry analysts believe that the growth of HR outsourcing is still on the rise. From non-core transactional administrative services to payroll and benefits, to emergency services revolving around pensions auto-enrolment and real-time information (RTI) payroll, there’s value to be found in partnering with external providers. There always has been – but it’s only over the last few years that the real value has been expressed.

Post-2008, in an atmosphere of economic stringency, that value was expressed in pounds and pence terms that suddenly made HR outsourcing an attractive concern for Finance Directors. HR Service Centres grew in stature – and size, as organisations hived off those transactional, non-core activities.

On top of the pounds-and-pence value offering was the added attraction that the HR teams (while a little slimmed-down) would be able to focus on a more strategic offering. In other words, they no longer need to fill in forms and push pencils, they can ‘get out there’ and ‘focus on talent’.

The new face of HR

It turns out that we’re now perceived as a web portal or a phone number. Peter Cappelli, Director at the Centre for Human Resources at the University of Pennsylvania, says that HR functions have been ‘cut to the bone’, and the theory that HR can provide a strategic approach internally “requires some heroic assumptions”.

He continues: “The world has moved towards self-service… [sometimes] there’s literally no one to talk to.”

So, the new face of HR is… no face at all!

Have we really gone too far?

We often talk ourselves down as HR professionals, but it’s time to talk ourselves up. We’re good. We’re very good at being “people people”. However, in the rush to outsource non-core activites, many organisations have taken the dim view that HR is transactional, and have forgotten the competent internal function.

The reason we outsourced so much in the first place was, as mentioned earlier, twofold. Financial value and strategic value. Maybe we have leaned too much towards the tangible, and too far away from the intangible.

Trish McFarlane last month called for what she calls ‘Acoustic HR’ – harking back to the days of MTV Unplugged when the likes of Nirvana switched off their amps and got their acoustic guitars out. I love the idea of Acoustic HR, because it’s everything that we’ve always been able to do. Everything that HR outsourcing should really be about. We’ve outsourced the administration so that we can actually deal with people.

So maybe we should turn off the laptop, stop sending so many e-mails, and get out there and talk.

A fresh reminder of the value we add

What does the Service Centre give us, apart from time? It gives us data. One of the most significant changes of the last 5 to 10 years is that HR is now one of the gatekeepers of the most comprehensive employee data available. It’s not just personal data any more, it’s engagement, retention, potential… you name it, we’ve got it. The value we add lies in the interpretation of that data for the benefit of the business.

If the perception is that there is no one to talk to, the knock-on effect is reduced engagement and retention. Therefore, doing what we do best – talking to people, resolving problems in the workplace – is going to have a positive effect on the bottom line. Equally, our pursuit of internal talent is going to bring down the cost per hire, and retain internal knowledge. Again, tangible value.

We have the time. We have the skills. We have the intelligence and the data at our fingertips. We just need to unplug ourselves, and help business leaders understand the value of the strategic side of HR as one of the reasons for outsourcing. An increased HR presence within an organisation really can add value, but we have to talk about it.

Maybe 2013 is the year that the rush to Self Service is accompanied by a more strategic approach, and maybe 2013 is the year that organisations derive even further value from HR outsourcing.

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