HR Outsourcing: Managing The People Issues

Frequently overlooked and at times treated as an afterthought are the people-related issues of an HR outsourcing decision. How these issues are handled can either undermine your outsourcing process or help you ensure success.

Of course “how things get done” at your organisation will influence when and how decisions are made, but a little pre-planning can’t hurt.

1.When do you communicate?
Start when you’re seriously considering outsourcing and when you know you will involve more than one or two people in the decision. Otherwise, the grapevine phenomenon will take over and you will have no control over accuracy. One approach is to begin communicating the decision to outsource the HR department immediately, letting the staff know in the process that the company cares about them and will support them. A series of various types of meetings (team, management, etc) supported and updated via the company intranet can work wonders. By the time the outsourcing occurs people are much better prepared and less emotional.

2.How do you manage expectations?
Don’t make the mistake of thinking you know how people feel. Ask them - use focus groups and surveys to find out what employees are really worried about so you can reassure them that the company will take these into consideration. People can get very noisy about things like outsourcing, so it’s important to address their issues early on. Help employees understand the business reason for the outsourcing decision, what will be the benefits to the organisation?

3.How do you set the stage for the transition?
You have probably found that most of your employees solve HR problems by getting their arms around you or a staff member and hanging on until they can get an answer from you. Once you’ve outsourced HR, things will be different and many employees will be uncomfortable. Sell the benefits of outsourcing, such as they will be able to accomplish many tasks themselves just using the HR portal and they will have better, more accurate information.

4.What about HR staff?
Believe it or not, but many times the outsourcing of HR produces more career opportunities than the HR staff had in the original organisation. Let people who have moved into the outsourced organisation be positive messengers, let people know you were going to support them on their career path. When you take the surprise out of ‘what ifs,’ people figure out they can survive. The process also helps them develop self-management skills so they begin to run their own careers rather than relying on someone else.

5.Will the current crop of HR staff be able to make the leap?
Some will; some won’t. A good first step is to lay out what the new roles will look like; redefine who/what the new HR generalist is. It’s to your advantage to ensure that some of your people will move to the outsourcer. This can help address company culture/value issues.

6.What will your HR department look like post outsourcing?
Outsourcing focuses on process improvement, so once you are able to flush out inefficiencies there’s a new energy in HR departments. HR is more in control of how it delivers business results and performance improvement. HR business process outsourcing elevates HR. HR can be an architect, a planner. But be aware: There’s a tendency of retained HR staff to confuse being “strategic” with attending more meetings. This must translate into action or HR’s strategic role will be short-lived.