Outsourcing of HR to Continue

Outsourcing of HR to Continue

Posted on 19/03/2013 by Phil Hall


What ever happened to the human resources department?

It used to be that HR was a single, physical place that workers could visit – to pick up a form, ask a question, seek advice, lodge a

complaint. Now if a company still has a standalone HR office, it’s probably much smaller than it used to be. If workers need help,

they may have to call an “800” number, consult a web portal or use a software program.

The outsourcing of HR has accelerated over the past decade and will continue to do so, said Lisa Rowan, search vice president

at IDC, the market research firm. While some companies may entrust their HR needs to a single outside firm, it’s more common to

parcel out functions to a range of outside vendors, she says.

Some HR experts are concerned that the trend has gone too far, to the point that employees are suffering in areas like training and

career development, and that employers are losing crucial business opportunities. “HR is supposed to be responsible for finding,

developing, retaining and training the best people,” Suzanne Lucas, author of a blog called the Evil HR Lady, said. It can also be

responsible for benefits, compensation, employee and labour relations, business partners, data collection and legal issues.

Outsourcing firms can take up various tasks, from payroll to benefits to recruiting, to free up a client to focus on its strengths, said

Don Weinstein, senior vice president for product management at ADP, a large HR outsourcing firm. In the past 10 years, the focus

of HR has shifted toward legal compliance and data collection, said Lucas. At a company that doesn’t have the means to hire

specialists, she says, outsourcing can allow it to “gain vast resources for a relatively small amount of money.”

Many internal HR functions have been “cut to the bone,” said Peter Cappelli, a management professor and director of the Centre for

Human Resources at the Wharton School of the University of Pennsylvania. Supervisors may be able to take over some important

roles, but many of the people who were experts at recruiting, training and career development have been laid off, he said. So is it

any surprise, he added, that companies complain that they can’t find good people?

“The world has moved toward self-service,” he said, and that puts the emphasis on technology, and on information over advice.

Sometimes, he said, “there’s literally no one to talk to.” — NYT