Human Resource Management in the 21st Century
Fact or Fiction?
Outsourcing: HR’s Ally or Nemisis
2007 Aug 16 Posted by Michael
Outsourcing has emerged as a key human capital management strategy.
Organizations of all types are experimenting with, implementing, and refining outsourcing strategies in order to achieve competitive advantage in the marketplace.
Organizations using outsourcing strategies have experienced fiscal gains through organizational restructuring and increased service efficiencies resulting in new perspectives and innovation strategies focused on driving organizational and human capital productivity.
Globally, human resource professionals have been impacted by outsourcing. The new perspectives and innovative strategies focused on driving organizational and human capital productivity have influenced how company’s organize themselves and execute business. It also has reshaped how organizational leaders perceive the role and responsibilities of human resource management professions. Increasingly, many organizational leaders perceive outsourcing as an efficient mechanism to increase productivity, accountability, and efficiencies while decreasing expenses, ineffectiveness, and inefficiencies.
Similarly, many human resource management professionals perceive outsourcing as an ally; an ally in talent acquisition, human capital development and knowledge management practices. However, other human resource professional’s view outsourcing as a nemesis; a force of retribution and elimination emerging after decades of human resource management professionals limited strategic leadership, focus on employee advocacy, and minimal business contributions.
In 2006, I developed and delivered a presentation for a global financial service company’s national client conference. In the presentation introduction I wrote:
“The 21st century knowledge age is like no other in commercial history. Organizations of all types are being called upon to operate in increasingly complex global environments characterized by decentralized leadership, innovative human capital management, and the necessity for human resource professionals to function as thought leaders, business partners, change agents, and enterprise enablers.
The rapidity and pervasiveness of organizational and marketplace change challenges businesses and stakeholders in every industry to continually reinvent themselves in order to remain competitive. Marketplace, organizational, and employee challenges to organizational survival are numerous and dangerous. As a result, organizational enablers, specifically human resource professionals, must anticipate and manage the scope, power, and unintended consequences of often irrational and fragmented challenges to business and cultural advancement, which if not addressed, could result in business inefficiency and promote cultural chaos.
Human resource management outsourcing has emerged as an organizational challenge. Increasingly, HR professionals are being challenged to demonstrate their value proposition to business productivity and enabling competitive advantage. Through outsourcing HR functions not explicitly aligned with achieving business goals, HR professionals can focus on relevant, mission critical activities.
Outsourcing provides HR professionals with motive and opportunity to realize, perhaps the first time, the strategic and tactical potential inherent their emergent role as business partner. In order to realize these potential, HR professionals must evaluate their current competencies and skill base relative to meeting the business knowledge and performance expectations associated with succeeding in the 21st century global marketplace.
The 21st century HR profession is on the verge of a renaissance of relevance. Outsourcing human resource activities that do not drive business results provides HR professionals with opportunities to demonstrate business relevance and organizational leadership. As outsourcing advocates, HR professionals will be positioned to influence the scope and focus of outsourcing strategies in their organizations. By so doing, they can build organizations possessing generative and adaptive capacities and enable competitive advantage.”
©Michael Williams, 2006
My thoughts concerning outsourcing; its emerging role in organizations and its influence on reshaping organizational leaders, human resource management professionals, and organizational stakeholder’s perceptions and actions concerning the roles and responsibilities of human resource management professionals in 21st century knowledge age organizations, is a place to begin the dialogue and discussion of this topic.
What are your thoughts?
Please feel free to provide experiences you believe will enhance our exploration of this topic.
Share This »5 Responses to “Outsourcing: HR’s Ally or Nemisis”
stan Says:
It is interesting to note how and where HR outsoucing is strongest within the global economy. Our company focuses on outsourcing but we note that the global trend has been slower here in South Africa as many clients focus on core hr challenges of transformation and talent attraction and retention. Parts of hr are outsourced on avproject basis and some transactional HR elements. It is not always cheeper to outsource locally but certainly more effective and efficient. It is definitely cheeper
for overseas companies to consider outsourcing to SA Ousource companies.HR in SA has achieved a high standard given the pace and speed of change and transformation in the socio-political and economic environments. The challenge still remains to offer clients true strategic and operational value in outsourcing as partners in the HR Business not only in transactional HR.
stan Says:
I should mention that in my years of HR experience, outsourcing provides an opportunity for organisations to focus and measure strategical implementation of the HR function and the outsourcer HR business partnership. Outsourcing brings new and diverse skills to clients by providers who add value in offering diverse,minnovative solutions based on their best practices. Also the HR outsource partner has a business focus looking for value add solutions to strategic business issues. 0utsourcing is far more than “getting rid of the hr adminmor payroll”. It reprents a partnership mindshift regarding “value” and “value add”.Make sure you select an HR partner who shares your passion and vision and do not outsource if your only driver is to reduce costs! Look for ROI in metrics also in
the non tangible measurement terms. Stan H (HR OUTSOURCE SOUTH AFRICA)
Jean Says:
If HR Professionals do not as a whole step up to fill the need, my fear is that as a profession they will find themselves OUTSOURCED to Operations Management and Logistics Managers. These areas appear to be able to speak the language of business and understand the business side more than the current HR professsional.
MarcN Says:
As an operations executive with moderate HR experience, and as an entrepreneurialist, I’m not a big fan of HR-outsourcing. There are too many intangible benefits provided by the internal HR group that play an important role in how our employees see themselves and the firm. One of the central themes of a successful internal HR function in a small, agile, and entrepreneurial business unit, is their ability to convey management’s genuine and sincere concern for the staff’s well-being and their professional development (to mention just two of many areas).
You cannot convince me that an outsourced HR group can do that - it would be as if we outsourced part of the ‘caring component’ of management. That ‘caring component’ is one foundation of a successful organization.
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Lynn Says:
Our company has had some great success with outsourcing some of our HR processes. While we first tried outsourcing to an offshore company, we found that really didn’t work for us in this arena. We currently outsource through a company called Homesource America. I am VERY pleased with their work. They have helped us not only in the HR dept but several of our other departments are using them now as well. They most recently took over our new hire process including benefit enrollment. Now I can have my assistant working on what needs to be done to move our department forward. I think a lot depends on what company you choose and their level of experience. I would definately recommend it but make sure you know who you are dealing with.
September 12th, 2007 at 10:35 am