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Should HR outsourcing be a part of your recovery strategy?
1 July 2009:
Previously unthinkable things are being considered. HR has been asked to find 10% savings within its own budget immediately and determine whether outsourcing would provide a more sustainable long-term cost structure. The expectation is that there’s another 20% of cost savings available.
The complication with this position is that outsourcing is a hard thing to do well; it requires a strategic mandate, organisational discipline and a long-term outlook, none of which have been in abundance recently. And if you get it wrong, the costs to put it right could dwarf any potential savings.
Additionally, although there are several credible service providers and approaches to choose from, there has been some negative press about the practice of HR outsourcing, and there have been fewer large contracts announced over the last 12 months than in any comparable period since 2003. Is HR outsourcing really a tool for our times, or is it something that has been tried and should now be passed over?
Given that market precedent is so important in driving the adoption of outsourcing, let’s look at things that have been holding back the current market. What has caused the reduction in large contracts in 2008 and 2009?
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Source: PA Consulting Group
