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Public-sector cuts 'could create HR outsourcing boom'

15 April 2010:

HR outsourcing companies have predicted a spike in demand for their services after the election as the public sector faces huge efficiency drives and budget cuts.

Sue Rippin, business development manager (HR) at NorthgateArinso, told PM she expects to see a “sudden influx of business in the next six to nine months”.

She highlighted local authorities and their related public bodies as areas primed for growth in outsourcing.

“There’s a stand down period at the moment because of the election, but irrespective of which politicians get in they will have to make savings and show a quick return on how they will save money across the public sector,” she explained.

Rippin added that outsourcing is “not all about cost-cutting and job losses” as HR teams can often be subject to Tupe and will become employees of the outsourcer.

Local councils are expected to be particularly open to outsourcing as it supports the shared services model, she said. Kent is one council looking at developing this area by working with other authorities to offer shared public-sector services.

“When you have already outsourced some services, the methodology is already there for sharing services, you don’t have to reinvent it, so it’s a far quicker transformation rate.