The trend in outsourcing at the moment is in fact that there is no trend, with organisations’ HR functions more inclined now to carefully assess the case for outsourcing on a function by function basis. But one new approach common to a fair few is to cut costs and add value by bringing transactional in-house, and to outsource – or rather partner on – more strategic elements. But how to ensure this approach is a success?
- Make sure you have the customer service skills in-house to make insourcing operational elements a success. “One of the big challenges is around customer focus and service mentality, which is different to cow-towing to the business,” says Penguin Random House’s HRD Neil Morrison. “I don’t think those skills necessarily sit within the HR profession. Many years ago when I was setting up an employment relationship service centre one of the things I did was stop recruiting HR people, and recruit customer service people instead and train them in HR.”
- Ensure the contract for whatever you’re outsourcing is future-proof. “If you start an exercise in 2014 for implementation in 2016 the world will have changed. So be sure you’ve got the necessary contingency to deal with that change with what you’ve signed,” advises Crossrail’s head of OE Rob Jones.
- Involve procurement. “Often HR specifies the service they want and procurement negotiates it,” says KPMG partner Robert Bolton. “But the HR function has to work hand in glove with procurement to manage those providers sensibly.”
- Remember that if it sounds too good to be true it probably is. “It’s all very well trying to screw your supplier to the wall, but that’s not sustainable,” says Jones. “Both parties have to achieve value otherwise you won’t get what you want.”
- Know what you’re trying to achieve and be aware that this will be a more complex contracting process where a strategic element is involved. “The key is knowing exactly what you want and to be more specific about the outcomes [outsourcing a strategic initiative should achieve],” says Buckinghamshire County Council’s Gillian Quinton. “With transactional services it’s outputs; so it’s the volume of transactions, the accuracy. With the high-end elements it’s more about the difference you want to make, and so it can be less tangible if you’re not careful.”