The UK’s 100 biggest companies are all considering outsourcing their human resources work, with many of the jobs likely to end up abroad, experts have warned.
Market analyst Amit Badami told Personnel Today that 2008 could see a huge explosion in HR outsourcing and offshoring.
Badami, director of the Emerging Markets Research Group, is in talks with many leading UK companies about outsourcing.
“Every FTSE 100 company is looking at outsourcing HR. One in 10 of them will do so within the next 12 months,” he said.
“They are doing it to cut costs, to become more agile and because it is best practice – they have done it with other departments.”
Badami added that many HR jobs outsourced to UK-based companies would eventually be subcontracted to low-cost countries.
“Lots of HR outsourcing will be done locally, but on contracts requiring cost reductions every year,” he said. “Within three years, that work will go abroad, perhaps through the back door.”
National Outsourcing Association director Nigel Roxburgh said that lazy HR in UK companies was driving a boom in outsourcing.
“In many organisations, once something is up and running and appears to be ticking along reasonably well, they think: ‘It ain’t broke so don’t fix it’,” he said. “Organisations need change, so sometimes that encourages outsourcing.
“HR outsourcing providers will promise in their contract to deliver certain things, and this can be measured using metrics,” Roxburgh added.
He said that the high-tech nature of most outsourcing firms meant they could offer more web-based inductions, training courses and employee engagement surveys, which were attractive to chief executives.
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“In many companies, appraisals do or do not happen, but with IT metrics, you can ensure that it happens and measure it.”
Europe’s biggest HR outsourcing event, the HRO World Europe conference, takes place in Brussels, Belgium, this week.
