HR chiefs divided over outsourcing

Senior HR leaders were split over the wisdom of outsourcing of HR at last
week’s Boardroom HR conference in Birmingham.

Former group HR director of BP Nick Starritt said the oil giant’s deal with
US outsourcing provider Exult has boosted the effectiveness of HR through
tighter control of costs and by allowing senior HR staff to focus on

"It enabled the HR function to have our people work in service of
unprecedented business outcomes," said Starritt. BP has cut its unit cost
per employee from $4,000 to $2,500, he said.

Under the deal, HR was segmented into 18 processes including recruitment,
training and compensation and benefits, which were standardised where possible
and focused more on adding value.

Starritt said outsourcing allowed BP to exploit the capital of Exult needed
to fund the development of service centres and Internet technology. This in
turn had boosted the role of HR at board level.

However, Vance Kearney, vice-president of HR at Oracle UK, argued that
outsourcing of HR is a hindrance to the function gaining a boardroom seat.

"How do you implement an HR database that can be aligned with a company’s
financial system and other parts of a company if it is outsourced?" he

"By investing in a central HR database there is no need to outsource.
Ultimately I do not buy outsourcing – what added value does it bring?"

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