Which path to follow?

How to ensure enough involvement at strategic level and
choosing to go down the outsourcing route. Advice by Neil Winter

Q: "As an HR director, I do not think I’m getting the strategic
level involvement that I should. A lot of this is down to my boss, who covers
both the finance and HR responsibilities for the organisation. What should I

A: In order to be a real strategic partner to the senior team, you
need to be the one who has sole charge of the HR portfolio. Working as a
sub-function of the finance director just does not give an HR professional the
exposure required. So, what can you do to change the situation – in other
words, how can you change your boss?

First of all, I would draft a ‘position paper’. Let your boss know what you
regard as the problems and lost opportunities of the current situation.
Emphasise the advantages that would accrue to both of you if the reporting
arrangements were switched. With your boss’s approval, copy the position paper
to his/her manager (presumably the MD). Propose to your boss that for a period
of time you report directly to the MD – just as a trial. During this trial,
demonstrate the sort of service, and hence the benefit, that results from the
senior executive having direct links to HR. Above all, keep working to ensure
that the inappropriateness of the current reporting relationship is apparent to
both of the key individuals (your boss and his/her boss). And be patient. Do
not be tempted to trip up or expose your boss in the mistaken belief that you
might gain from his/her perceived shortcomings.

Q: "My company is in the high-tech sector and the organisation is
under an immense amount of cost pressure, including HR as a department. A
couple of companies in our industry have gone down the HR outsourcing route.
Should I consider it?"

A: My first thought is that you should not leap at outsourcing as a
panacea to your cost-base problems (or perceived problems). The key question
is: do you wish to maintain the HR service level you currently provide? If you
do (or indeed, if you wish to enhance your service), then you need to
understand that moving to an outsourced solution is unlikely to dramatically
reduce your cost of service provision. From the outsourcing service provider’s
perspective, there are only two ways in which cost savings can be achieved for
clients: productivity gains from superior technology and access to a different,
cheaper labour pool. Developments within the past five to 10 years mean that
telephone and computer technology capability is now an available asset for any
reasonably-sized organisation. Furthermore, those cheaper, often overseas labour
pools can bring service quality problems in terms of really understanding your
business and HR issues.

So, what other alternatives do you have? Without knowing the size and scope
of your HR organisation and the nature of your internal customers, it is
difficult to be prescriptive. It may be, for example, that scope-wise, your
organisation’s needs could be met by introducing the remote handling of
enquiries – which, in turn, could be achieved by an internal reorganisation
rather than outsourcing. In other words, you could create your own HR services
centre. Compared with outsourcing, you would be in greater control of the
policy messages and HR solutions that your staff are providing and you would
not be dealing with your internal customers through the filter of an
outsourcing organisation which has its own culture and attitudes – features of
an outsourcing service which are tough to eradicate.

Clearly, there are several alternatives to the apparent attractions of an
outsourcing move – repositioning part of your function as an internal service
centre is just one.

Neil Winter is a consultant with YSC Consulting in London. He previously
worked at the US consulting firm of RHR for six years. He has also worked as an
organisational development consultant at Coopers & Lybrand, having made the
transition from HR management in the energy sector, where he worked for Sun and
Mobil Oil.

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