HR on uncertain ground as firms opt for offshoring

The number of companies who offshore their HR functions looks set to rocket, according to new research.

The Confederation of British Industry’s (CBI) Offshoring Survey 2004 showed that 6 per cent of organisations are considering offshoring HR, compared to just 2 per cent who have already relocated it overseas.

However, HR staff can be reassured by the fact that of all the functions likely to be sent abroad, HR is the least likely.

John Cridland, deputy director general of the CBI, told Personnel Today that HR could never be fully offshored, as it had to retain a local presence to deal with local issues, such as industrial relations and tribunal actions.

The survey of 150 chairmen, chief executives and senior level directors, found the operations most likely to be offshored are manufacturing, research and development and IT support and development.

The urge to offshore is growing with 21 per cent of businesses saying the pressure is ‘very great’ this year compared to 14 per cent in 2003.

Reducing costs still tops the list of reasons, with efficiency and proximity to new customers other strong imperatives.

The research also shows that more companies are offshoring skilled jobs (about 60 per cent) rather than unskilled jobs that have traditionally been the focus.

Digby Jones, CBI director general, said that the UK needed to concentrate on up-skilling its workforce to combat this threat and make sure there are no unskilled workers in the UK within the next 10 years.
For full coverage of this week’s CBI conference see next week’s issue

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