Outsourcing of HR functions is now extermely commonplace. Some aspects of HR are core to the way a business operates – being a key driver of the company’s culture and also the selection process for new employees. Nevertheless there are aspects of HR which lend themselves very cleanly to either outsourcing or shared services. Many firms outsource the administative sides of HR such as maintaining employee records and tracking event or time triggered employee activities – such as performance reviews. Other firms have embarced external providers to drive recruitment processes.
I have seen many cases where HR Outsourcing has been extermely successful – many of the risk factors assocaited with HR outsourcing are common to all forms of outsourcing – to mitigate these risks I would suggest following a standardised model such as eSCM to drive the process. As always one cannot overestimate the importance of clearly defining the HR Services that will be provided. Work with your Service Provider and Advisors to ensure that a very clear HR Service Level Agreement (SLA) is in place- if possible get as many sample HR SLAs or HR SLA templates as you can to provide a comaprision to what you are being offered. This article provides some good insights into experiences managing HR outsourcing. As always please try to ensure that you monitor and manage the HR SLA effectively (if possible using an SLA Management tool) – this will drive good behaviour on the Service Provider side and provide you with a performance record if problems arise.
