Outsourcing a threat to future of HR

The HR function faces severe cutbacks in the future if it is not respected
by the board, warned a leading management school director.

Andrew Kakabadse, deputy director of the Cranfield School Management, told
delegates that the HR function is the principal target "by miles" in
the business drive to outsource services.

An ongoing survey by Cranfield of outsourcing in 690 companies in Europe
shows that HR is the primary target for outsourcing irrespective of sector.

"IT services are the second but this is renewable technology. HR is a
one-off," said research author Kakabadse.

The research, which is due to be published as a book, SmartSourcing, later
this year, shows that 44 per cent of British and US companies are transferring
staff to outside suppliers.

"It is not so much about losing jobs but more about shifting
employer," he said. "In the best companies, HR was next to the board
and HR directors had made a business interpretation of what the HR contribution
had to be."

Cranfield’s research shows that the HR function is not rated highly in

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