HRO Today’s publisher answers the rarely asked question: Can companies outsource HR functions and still be seen as good corporate citizens with really engaged employees?

by Jay Whitehead

The problem with looking at life through an HRO lens is this: Outsourcing is only good for what it’s good for. No less, but no more. I admit being a raving fan of HRO as a revolutionary business tool, a cheerleader extraordinaire. It is a really good tool for doing what it does—delivering employees and employers better service for less cost. While surely less important than a cure for cancer,HRO has done worlds of good for companies and their overworked, ever-emotional employees.

But here’s the real scoop, HR leaders. If we are to believe a recent study from the attitude-measurement geniuses at Sirota Survey, how employees feel about their companies has almost nothing to do with how the company does work in HR. Whether you outsource HR, do it in-house, or do it via your grandmother’s knitting club, it will make little difference in what your employees feel and say about how they are being taken care of. And how the company delivers HR services has virtually zero impact on boosting engagement levels.

Engagement is all about employees’ view of their company’s corporate responsibility profile. “Corporate responsibility,” of course, is the new catch-all phrase that includes stakeholder-relations components such as compliance, governance, sustainability, and corporate citizenship. (And for you job-title trend-followers out there, the hottest new C-suite role is the Corporate Responsibility Officer, or CRO.)

For this study, the Sirota surveyed 70 large organizations representing 1.6 million employees. It found that those with a positive view of their organization’s corporate responsibility commitment have higher levels of engagement (86 percent compared with only 37 percent who are negative about their employer’s corporate responsibility profile), and better views of their senior management’s integrity (71 percent versus 21 percent).

Doug Klein, Sirota’s president, told me, “To employees, corporate responsibility and business success go together. Companies that enhance their reputations through these programs perform better and generate greater satisfaction and employee loyalty from workers.” That means that when employees see their companies as “responsible,” they think they are being treated better, even if they’re not.

Please note: I’ve got a dog in the fight for corporate responsibility since I chair the CRO conferences and publish CRO Magazine. But this large-scale study seems to indicate that for all the focus on HRO’s potential impact on employee engagement, the real engagement work happens higher up in the organization. Tone from the top is really needed to tap employee emotions.

Of course, HRO can help a bit. For example, there are one or two world-class employee recognition providers whose programs are great for recognizing and rewarding employees’ contributions to the company’s corporate responsibility initiatives. There is a lot of data supporting the fact that a formal employee recognition program—especially programs that have both web self-service and manager training components—enhance that company-employee connection, cut turnover, enhance loyalty, and even boost productivity. But the big point is that without that top-level leadership on responsibility issues, this study seems to confirm that HRO alone is short of the horsepower needed to drive engagement.

The conclusion is clear. Outsourcing is the weapon of choice for service and cost improvements. But when it comes to employee engagement, it’s all got to start with corporate responsibility initiatives. It doesn’t just mean donating money to the symphony. (If that’s the extent of your responsibility agenda, employees will just think you want to listen to music, not that you want to become a better corporate citizen.)

What it really means is full-scale compliance, governance, sustainability, citizenship, and even socially responsible investing programs. It means doing more than defending the company and its senior execs from going to jail. It means creating offensive weapons—corporate responsibility programs that the company can use to help sell product, raise capital, and recruit talent. That’s the ticket to employee engagement.

By the way, once you’ve done all that, don’t forget to add that employee recognition program to reinforce the good behaviors. And you can always see the Resource Guide on to help you pick a recognition provider.

Tags: Benefits, Employee Engagement, Learning & Development, Multi-process HR, Recognition & Rewards, Sourcing

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