With a few notable exceptions HR outsourcing has so far not taken off in the UK as predicted. Where organisations have attempted to do so they have immediately hit up against the problem of redesigning messy and inefficient processes (e.g. streamlining the recruitment process, reducing the number of pay schemes in use). Trying to outsource with poor processes is a recipe for disaster and the expected savings are unlikely to materialise.
Nevertheless, outsourcing is here to stay. HR administration is becoming more complex through greater legislation, regulation and changing policies on matters such as diversity and discrimination. This makes it increasingly expensive and eventually everyone will be trying to cut these costs wherever possible through the increased use of technology to handle such tasks.
Regardless of future savings though, outsourcing ultimately is a one-off benefit. It will never offer a business a sustainable competitive advantage.
But then outsourcing itself is not the main issue here. The HR Charter is about building a profession that adds value, not an administrative function that tries to provide a commodity service at the least cost. HR outsourcing is actually symptomatic of a profession in decline. A profession that has failed to really become strategic or convince boards of directors of its worth.
Outsourcing is all about work where the level of expertise required is minimal. The HR Charter is about real, value adding skills. Those who want to lead the profession forward need to develop themselves in the areas of HR strategy, organisation design and the role of HR business partners who can marry their intimate knowledge of their business with a high level of HR expertise to provide solutions to difficult organisational problems.
Whether outsourcing is currently on your agenda or not – when it finally arrives at your door in what direction will you move and do you have the skills to enable you to do so? Use the HR Charter as your guide, your benchmark and your touchstone. So what action do you need to be taking now?
New HR Charter series
You can also read all the debates around the New HR Charter and add your own comments by clicking on the links below.
The New HR Charter – Introduction
The New HR Charter Part 1 – Does HR have a reputation problem?
The New HR Charter Part 2 – What does best practice mean in HR?
The New HR Charter: Part 3 – Do competencies and 360 work?
The New HR Charter: Part 4 – The opposite of best practice?
The New HR Charter: Part 5 – HR Causality – which way does the arrow point?
The New HR Charter: Part 6 – Employer of choice?
The New HR Charter: Part 7 – HR professionals: GP’s, consultants, homeopaths or quacks
The New HR Charter: Part 8 – Politically correct yes – but is HR more effective?
