Yesterday’s Advisor presented pitfalls of outsourcing; today, things you can do to avoid those pitfalls.
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As the list of outsourcing pitfalls is quite extensive, it pays to be careful when opting to outsource. Following the suggestions below will help ensure that you get all the advantages of outsourcing without all the problems.
- Have a defined process for choosing the best provider. Before you begin searching for a provider, clarify what services you want, what your expectations are, what your budget is, and how you will evaluate providers.
- Fully analyze the provider’s capabilities in advance. You need to be sure from the outset that they can deliver what you need. For sure, talk to current users.
- Plan carefully. Make sure both sides are in complete agreement about the expectations, timing, and processes. At the same time, have realistic expectations.
- Provide plenty of information. You want your expectations well understood from the outset. You don’t want to hear later, “Oh, we had no idea there were so many records; we didn’t know you needed that kind of report.”
- Ensure that the contract covers contingencies. Don’t leave important items to chance. Exact wording of the contract is important.
- Maintain separate contingency plans. Separately, have contingency plans in place in the event that expectations are not met. What’s the downside of the outsourcer not coming through? Are you shut down, or is there just a delay in getting what you need?
- Communicate frequently with your outsourcer. Be sure everything is on target. Set milestones, if appropriate, so that major problems are discovered quickly and can be addressed. Frequently communicate internally as well in order to manage expectations.
Evaluate. Establish your criteria and measuring schedule for ensuring that your goals are being met.
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Considerations for Outsourcing
In a BLR® webinar titled "HR Outsourcing and Offshoring: How to Manage the Legal, Operational and Ethical Issues of Third-Party HR," Robin M. Throckmorton, MA, SHPR, president at Strategic Human Resources, Inc., in Cincinnati, Ohio, offered some insights about outsourcing HR functions. Below are some potential considerations:
- Facing the dilemma of costs vs. service.
- Recognizing when technology becomes too costly.
- Seeing the need to focus on HR strategy rather than nuts and bolts.
- The opportunity to access outside expertise.
- The business case for outsourcing becomes apparent.
- You have special needs that can’t be met internally.
In addition, says Throckmorton, ask yourself:
- Is a given HR function one of your core competencies?
- Is what you are offering internally “best in its class”?
Does your internal operation maximize service levels and efficiencies while minimizing costs?
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Outsourcing—just one more challenge for HR, and in a small department, everything’s just that much tougher.
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