A common HR & payroll outsourcing (BPO) mistake – Wrong perception of organisational change
The belief that HR outsourcing and outsourcing in general means job losses can limit an organisation’s willingness to consider it. However, BPO in the HR arena need not mean downsizing and outsourcing is not a synonym of cutting resources. Instead, it is the opportunity to help develop your people into HR experts by moving away from laborious functional tasks and freeing up time to focus on the more added value, strategic input that businesses really crave. The business partner HR model requires the function to integrate more thoroughly into business processes and to align their day-to-day work with business outcomes. With business leaders increasingly seeing the importance of HR and talent on business success, HR needs to become strategic and remove the administrative burden.
A CHANGE FOR THE BETTER
Feeling uncertain about BPO is natural. Dealing with trade unions or engaging your HR team and managing change can be a hard task. But maintaining the status quo to keep the peace, continuing with inefficient processes and people in job roles that are uninspiring and unrewarding can be dangerous in the long-term. It can also cause a disconnect between the business strategy and what HR is able to deliver.
Change and social impact, however, can greatly benefit business performance. The HR Magazine article ‘Outsourcing: To make money rather than to cut costs?’ (2011), explains that, “outsourcing can provide infrastructure and services to support the process while freeing up capacity, and ultimately allowing directors to focus on the operational side of expansion.” This does not mean downsizing and a loss of internal morale. Rather, it argues, “outsourcing HR processes can reinforce company culture… providing credible and actionable data for decision-making.”
Rather than wanting rid of HR, The Economist Business Intelligent Unit’s ‘CEO Perspectives’ (2012) report finds that business leaders actually want HR to be more strategic and more involved in decision-making: 70% said they wanted their head of HR to be a “key player”, while the majority – 54% – listed their biggest business concern as “having insufficient talent within the organisation as a whole”. The need to reduce the administrative burden on the internal people management process and allow for strategic insight, is therefore clear.
“change and social impact can greatly benefit business performance”.
MOVING UP THE VALUE CHAIN
The areas of talent management and people strategy are becoming more important to innovative, growth organisations, not less. Outsourcing of payroll and HR administration can therefore alleviate internal staff of tasks that limit their strategic input and move up the value chain.
BPO is a way to access best practice, including:
1.Benchmarking against world-class HR companies and competitors
2. Internal HR experts given access to peers locally and internationally
3. The latest HR technology, instantly updated, including for example, mobile apps and dashboard analytics
4. Flexible access to and ability to deploy new HR services
5. The latest in HR thinking, expertise, practices and processes
“Business leaders want HR to be more strategic and more involved in decision making”.
HR outsourcing is a strategic and a long term decision. Only by selecting the right partner can you ensure BPO is a success for your business both now and in the years to come.
Written by: Connect@ADP team
Originally published August 22 2014