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Best Practice Tips for HR Outsourcing Initiatives
Human Resources » HR Outsourcing

Chrm Message From: rahul Total Posts: 4 Join Date: 15/07/2006
Rank: Beginner Post Date: 17/07/2006 02:09:24 Points: 20 Location: ----

The increasing number of success stories of companies using outsourcing to gain competitive advantage and increase shareholder value has sparked a growing quest among enterprises for best practice tips on structuring the outsourcing initiative as well as managing the ongoing relationship. We asked leading HRO firms for advice on three questions; here are their recommendations.

Q: What are the top success factors to incorporate into the contractual and relationship structure to avoid the pain of having to switch providers?

Steve Bohannon, President, EDS HR Business Process Outsourcing: The structure of an HR outsourcing relationship, and ultimately the contract, is an outcome of much that goes before it. Success emanates from the hard work that goes into creating a positive relationship with open communication.

-> Alignment of Goals: What makes that foundation work is the alignment between provider and client around their mutual understanding of the value proposition. The client's clarity of thought around what it is seeking in an HR outsourcing agreement is absolutely critical. Those goals need to be understood at many levels within the organization. Secondly, it's equally important that the provider has clarity around its ability to deliver on that value proposition.

-> Open Communication: Once goals and value propositions are understood, it is important to merge them through open, honest communication steeped in realistic expectations around how things are going to work. The structure of the relationship must reflect realistic expectations about economic returns, levels of services, and transitions.

-> Governance Structure: A key element of the contract is the governance structure. A model with the following four committees, made up of client and provider members, helps ensure that the relationship honors the spirit and letter of the contract. The Executive Steering Committee guides the overall process, making sure that both parties adhere to the principals of the relationship. The Operating Committee is responsible for day-to-day success of service delivery and the economics of the contract. The Projects Committee focuses on the projects that require attention away from the day-to-day operations. The Incidents Committee manages issues and creates process to quickly deal with any problems.

Ultimately, it is the ability to communicate openly at all levels in a complex relationship that is the key success factor.

You may view the rest of the article here

More views of members shall add up to an excellent discussion on the issue of Outsourcing. Thanks Saumil for initiating an interesting topic of immense importance.

Best Regards

Rahul M

Chrm Message From: Total Posts: 2 Join Date: 15/07/2006  
Rank: Beginner Post Date: 20/09/2010 09:37:02 Points: 10 Location: ----

Thanks. Very informative.


Chrm Message From: debora Total Posts: 108 Join Date: 15/07/2006  
Rank: Leader Post Date: 26/07/2019 11:28:53 Points: 540 Location: ----

HR outsourcing is a growing trend, spread across diverse pathways for implementation. While HR outsourcing can help streamline processes and contain operational costs, there are certain challenges that can potentially derail your outsourcing initiative. Here are three HR outsourcing best practices that can help you achieve efficiency and drive business growth:

Process Documentation

Process documentation is crucial to helping outsourced HR staff members become familiar with current policies and procedure to perform activities such as payroll, performance management, exit formalities, etc. A process document that clearly details internal controls necessary to ensure HR outsourcing best practices and to appropriately separate duties and supervisory controls is key to smoother an outsourcing experience.

Partner with an HR consulting firm

A professional HR consulting firm is recommended when you are looking to outsource a specific task or assignment, or your entire HR function. Although there are individual HR consultants available, hiring them for more than a onetime project may not be a great idea. SMBs needs assistance with HR across a wide range of activities (strategic and managerial), so a firm with diverse staff and skills can handle the diversity of HR activities with ease.  HR consulting firms also bring their technical expertise to the table which is an invaluable asset for SMBs looking to contain costs. Major HR consulting practices have sophisticated end-to-end HR tools at their disposal, enabling them to perform manual and repetitive tasks at scale.

Leverage the power of HR software

For SMBs, this is probably the most preferred option given that it works as an end-to-end solution and is cost optimized. The HR software will have all the labor and compliance regulations and protocols built in and will also offer employee data management, from onboarding to benefits and payroll. Further, it will provide the tools to track all relevant employee screening and verification details and will store all the data in a cloud-based system, ensuring location and device-agnostic accessibility. Typically, it will also deliver some level of employee self-service through the Internet or a mobile app.

Measure the ROI of your HR outsourcing initiative

Any outsourcing strategy is based on specific objectives in mind. However, once the program is up and running, organizations often fail to determine whether the expected outcomes have actually been achieved.

he simplest way to go about an HR outsourcing plan is to step back and assess your needs. Consider your company’s long and short-term goals, evaluate budgetary constraints, and measure the role and impact of HR in the scheme of things. You can easily overcome the challenges and issues of HR outsourcing with these four HR outsourcing best practices. 

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