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Run outsourcing like a business; it’ll boost HR’s image

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in Employee Benefits Program,Hiring,HR Management,Human Resources,Leaders & Managers,Management Training

HR is becoming less of a task-oriented profession and more of a project-management one. The biggest example: outsourcing.

HR professionals are increasingly called upon to serve as business project managers to handle outsourcing projects. Some aren’t prepared to assume such a role, but those who are can boost their image as a strategic player.

“Outsourcing forces you to think strategically,” says Linda Bell Thomas, HR director for the city of El Paso, Texas. “There is such a force out there for using outsourcing that you have to be able to analyze whether it can improve your processes even if you don’t use it.”

For example, say your organization is considering outsourcing benefits administration and you will oversee the project. You have a chance to demonstrate your business skills if you can do a cost-benefit analysis, negotiate with vendors, manage relationships with them and measure the return on investment (ROI).

Operate the outsourcing project as a successful business venture and you will contribute to the organization’s bottom line.

Tips for managing vendors

Use the tips below to handle relationships with outsourcing vendors, organization executives and managers to boost HR’s reputation as a business strategist.

Do a cost-benefit analysis of the proposed outsourcing project. For example, says Thomas, “I know how much it costs per person for my staff to do recruiting compared to outside recruiting. I know how providers structure their fees and costs.

Solicit input from department managers before making a final decision on outsourcing. Meet with the managers again after making a final decision to explain the benefits of outsourcing. Provide statistics and other information to demonstrate how outsourcing helps managers meet their business goals.

Learn how to measure the performance and ROI of HR functions that your organization outsources.

Make sure outsourcing contracts include metrics to measure performance. Ensure that contracts include financial penalties if a supplier doesn’t deliver as promised.

If possible, implement HR functions that allow the easiest measurement of ROI and performance. For example, it’s easier to quantify outsourcing success in areas such as benefits administration than in recruiting and training. 

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