Personnel Today
  • Home
    • All PT content
    • Advertise
  • Email sign-up
  • Topics
    • HR Practice
    • Employee relations
    • Equality, diversity and inclusion
    • Learning & training
    • Pay & benefits
    • Wellbeing
    • Recruitment & retention
    • HR strategy
    • HR Tech
    • The HR profession
    • Global
    • All HR topics
  • Legal
    • Case law
    • Commentary
    • Flexible working
    • Legal timetable
    • Maternity & paternity
    • Shared parental leave
    • Redundancy
    • TUPE
    • Disciplinary and grievances
    • Employer’s guides
  • AWARDS
    • Personnel Today Awards
    • The RAD Awards
    • OHW Awards
  • Jobs
    • Find a job
    • Jobs by email
    • Careers advice
    • Post a job
  • XpertHR
    • Learn more
    • Products
    • Pricing
    • Free trial
    • Subscribe
    • XpertHR USA
  • Webinars
  • OHW+

Personnel Today

Register
Log in
Personnel Today
  • Home
    • All PT content
    • Advertise
  • Email sign-up
  • Topics
    • HR Practice
    • Employee relations
    • Equality, diversity and inclusion
    • Learning & training
    • Pay & benefits
    • Wellbeing
    • Recruitment & retention
    • HR strategy
    • HR Tech
    • The HR profession
    • Global
    • All HR topics
  • Legal
    • Case law
    • Commentary
    • Flexible working
    • Legal timetable
    • Maternity & paternity
    • Shared parental leave
    • Redundancy
    • TUPE
    • Disciplinary and grievances
    • Employer’s guides
  • AWARDS
    • Personnel Today Awards
    • The RAD Awards
    • OHW Awards
  • Jobs
    • Find a job
    • Jobs by email
    • Careers advice
    • Post a job
  • XpertHR
    • Learn more
    • Products
    • Pricing
    • Free trial
    • Subscribe
    • XpertHR USA
  • Webinars
  • OHW+

HR strategyOutsourcing

Outsourcing human resources: pushing beyond the boundary

by Ross Bentley 12 Nov 2007
by Ross Bentley 12 Nov 2007

It would appear that among human resource chiefs the jury is still out on the merits of outsourcing.

A survey of 168 HR directors, carried out by recruitment process outsourcing company hy-phen at the recent Chartered Institute of Personnel and Development annual conference in Harrogate, found many remain unconvinced about the benefits of farming out HR processes.

A majority (56%) of respondents said they feel outsourcing of HR functions to an external third party increases organisational risk, while almost half (49%) said they think outsourcing either brings no value or erodes the value of a function.

But how is this reticence explained?

Loss of empire

At HR outsourcing specialist Hays Resource Management director of operations Graham Snuggs believes the primary reason many HR professionals don’t consider outsourcing is because they fear it will lead to a ‘loss of empire’.

But, in many cases, he says, a large proportion of this ’empire’ consists of high-volume, transactional tasks, such as payroll, recruitment, and induction training, which bogs HR down and prevents it from getting its teeth into the real strategic work.

“HR spends a lot of time dealing with low-level work and sometimes can’t see the wood from the trees,” says Snuggs, a former regional HR manager for financial services company Prudential.

“But by outsourcing some of these elements they would have more time to concentrate their efforts on reaching strategic goals in areas such as people strategy and talent management .”

But in some cases HR outsourcing can go further.

For example, Snuggs oversaw an outsourcing deal with friendly society Liverpool Victoria, which was regarded as something of a groundbreaking arrangement when it was set up in 2001. Not only were transactional processes such as IT, administration and training outsourced, but so were elements of the HR business partner roles, such as interfacing with line managers on strategy.

Snuggs says: “I was able to go to the marketplace and recruit the best people for these roles – people with vision and influencing skills.

“We were also set up to make a profit, which means we operate more efficiently and help HR move away from being regarded as cost centre.”

Cost centre

Reducing overheads and, therefore, costs is a main driver for outsourcing and Neil Jones, managing director of hy-phen, says he has seen a trend towards HR adopting some of the discipline of the procurement department when purchasing outsourcing services.

He says: “There’s a dynamic where HR and procurement departments are meeting in the middle. Increasingly, HR has savings are on its agenda while procurement professionals are broadening their remit and using things like performance metrics to work out the value of a proposition.”

This has led, says Jones, to a number of organisations setting up strategic sourcing departments that combine both HR and procurement people – where cost and value are equally weighed up.

Leigh Hunt, group head of resourcing at UK technology firm Kingston Communications, is in no doubt of the savings that can be made from outsourcing.

She hired recruitment process outsourcer Independent RPO last August to manage the bulk of the company’s recruitment. Since then, she says, the time to hire candidates has been reduced from 30 days to 20 and the cost per hire has been trimmed by about £1,000 – mainly because of the reduced use of recruitment agencies.

“We were on a recruitment drive but lacked the expertise to run it efficiently in-house and were spending a great deal on recruitment agencies,” she says.

Independent RPO chief executive officer, Phil Clarke, say this situation is particularly prevalent in mid-sized companies employing anywhere between 2,000 and 10,000 employees.

“There is a lot of recruitment going on in these organisations but many won’t have adequate sourcing expertise in-house,” he says.




Avatar
Ross Bentley

previous post
Migrant professionals benefit from ruling on training posts by Court of Appeal on Highly Skilled Migrant Programme
next post
Kineo provides free rapid e-learning course on e-learning design

You may also like

Chief financial officers now more involved in HR

1 Jul 2022

CIPD Festival of Work: ‘Use crises as catalysts...

15 Jun 2022

Does a four day week work? Charlotte Lockhart...

1 Jun 2022

Davos 2022: ‘Invest in social jobs to save...

27 May 2022

Davos 2022: Upskilling workers necessary to overcome business...

26 May 2022

Davos hears that ‘wages can rise’ without creating...

26 May 2022

Adapt culture to hybrid work: do not force...

20 May 2022

Women in FTSE 350 leadership: ‘A lot of...

20 May 2022

Squishy, flabby, foggy HR? Andrew Bartlow talks to...

20 May 2022

How the Global Business Mobility visa will overhaul...

14 Apr 2022
  • NSPCC revamps its learning strategy with child wellbeing at its heart PROMOTED | The NSPCC’s mission is to prevent abuse and neglect...Read more
  • Diversity versus inclusion: Why the difference matters PROMOTED | It’s possible for an environment to be diverse, but not inclusive...Read more
  • Five steps for organisations across the globe to become more skills-driven PROMOTED | The shift in the world of work has been felt across the globe...Read more
  • The future of workforce development PROMOTED | Northumbria University and partners share insight...Read more

Personnel Today Jobs
 

Search Jobs

PERSONNEL TODAY

About us
Contact us
Browse all HR topics
Email newsletters
Content feeds
Cookies policy
Privacy policy
Terms and conditions

JOBS

Personnel Today Jobs
Post a job
Why advertise with us?

EVENTS & PRODUCTS

The Personnel Today Awards
The RAD Awards
Employee Benefits
Forum for Expatriate Management
OHW+
Whatmedia

ADVERTISING & PR

Advertising opportunities
Features list 2022

  • Facebook
  • Twitter
  • Instagram
  • Linkedin


© 2011 - 2022 DVV Media International Ltd

Personnel Today
  • Home
    • All PT content
    • Advertise
  • Email sign-up
  • Topics
    • HR Practice
    • Employee relations
    • Equality, diversity and inclusion
    • Learning & training
    • Pay & benefits
    • Wellbeing
    • Recruitment & retention
    • HR strategy
    • HR Tech
    • The HR profession
    • Global
    • All HR topics
  • Legal
    • Case law
    • Commentary
    • Flexible working
    • Legal timetable
    • Maternity & paternity
    • Shared parental leave
    • Redundancy
    • TUPE
    • Disciplinary and grievances
    • Employer’s guides
  • AWARDS
    • Personnel Today Awards
    • The RAD Awards
    • OHW Awards
  • Jobs
    • Find a job
    • Jobs by email
    • Careers advice
    • Post a job
  • XpertHR
    • Learn more
    • Products
    • Pricing
    • Free trial
    • Subscribe
    • XpertHR USA
  • Webinars
  • OHW+