Cost savings are nice, but also consider outsourcing’s impact on your organization’s culture.
by Andy Teng
Feeling under siege? I know I am. Everyone I know knows of someone who has lost his or her job in this economy, and we’re all afraid to be the next in line on the chopping block. So in this environment, it’s difficult to be bold and innovative within our organization. So how should employers view HRO?
As HRO Today has been reporting, interest in outsourcing remains high among employers for several reasons. The most pertinent driver is cost savings. Of course everyone knows that shifting to a scalable model, taking advantage of a provider’s economies of scale, and eliminating inefficiencies though the adoption of best practices are sustainable methods of savings. However, I hope employers aren’t considering outsourcing only as an interim solution because an integrated HRO program can have a profound impact on company culture for some time.
One of the ways in which outsourcing affects corporate culture is it forces businesses to rethink service levels. Sure, it would be nice to provide high-touch, in-person service to every employee, but HR has entered a new era of accountability. That means it must justify its spend, and white-glove
attention isn’t the responsible way to go. That’s not to say that clients should suffer from poor service; rather, they must accept changes in which their HR needs are met.
An example is the use of offshore, low-cost call centers. On more than one occasion HR leaders have expressed to me their fear of having an accented call handler on the other end of the phone. To me, this anxiety seems unfounded. Most good providers offer offshore support staffed by knowledgeable professionals with a strong command of English. Among cost-savings steps, this is the veritable low-hanging fruit, and companies shouldn’t be anxious about the language difficulties.
Another way in which HRO helps to usher in service delivery change is through expanded self-service. Although many organizations have implemented robust tools that enable employees to administer their own change-of-life events, the fact remains that providers have for years offered technology with much more functionality than buyers have taken advantage of. Whether because of inertia, fear of the unknown, or for some other reasons, this resistance has resulted in missed productivity gains and organizational transparency.
Of course the most notable way in which outsourcing affects corporate culture is it forces companies to decide which activities are considered core and which are not. Getting around this new way of thinking requires fortitude because the fiefdoms deemed non-essential will certainly fight back. The political backlash can be severe, and there will always be naysayers looking to criticize any outsourcing initiative after the fact. But if performed correctly, this reexamination process will lead to the most effective use of today’s thinning resources while shedding distracting tasks to a third party.
In difficult times, leaders face difficult decisions, and for those in charge of HR, one of the hardest questions is how to incorporate outsourcing in their operations. To really make effective use of HRO, it’s not enough to consider just its cost-saving aspects; being mindful of the cultural repercussions is just as important. So when tallying the cost-benefit analysis of outsourcing, make sure to include these intangible impacts on company culture.