Understand who the real “player” is. Leverage your strength as the buyer.
For the HR professional to be an effective participant (and driver since she is paying the bill) in every outsourcing arrangement, there are essential skills required. One of the most crucial is how to negotiate.
Regardless of culture, it seems universally fair to say that not enough attention is given to the value and appreciation of the ability to listen and to negotiate. Let’s examine negotiating and the more subtle elements that the books tend to not discuss at all.
In HR outsourcing, the level of negotiating skill demanded needs to be at least the same as the ability of those on the other side (the provider). In fact, it is always helpful to be even more so. An accident waiting to happen is the risk when the HR pro is not astute enough to negotiate the arrangement and the other side—for whatever reason—sees the resulting “advantage” as desirous.
Where to begin? The first requirement is to give sufficient time for preparation so that you know what you want from the arrangement. You need to make yourself available and invest the time the situation demands so that this process becomes an opportunity to get focused and helps you ensure that you see the real advantages for yourself and your organization in such an arrangement. Using your staff or other key colleagues in (and outside) the organization will help you crystallize and focus your attention on this most important undertaking. Remember it is a two-step process. Once you identify the potential opportunities that outsourcing offers, then you need to identify the best provider to translate that strategy into reality.
As part of this brainstorming process, let me suggest you write down the objective(s) of this project and then do a gap analysis (not to fear—nothing too complicated, just compare what you hope to get with what you have to determine if reducing or even eliminating the gap with an outsourcing arrangement warrants your attention). Be sure to put it in writing for yourself. The more detailed the better.
Second, remember as part of this brainstorming process to ask yourself if the potential outsourcing provider sees you as the client, AND does she appreciate the business you are both discussing. Are you a small fry playing in the big leagues? Does the provider try to meet with the CFO, CEO, or any others in the organizations with or without you present? You need to consider this “soft side” of a potential arrangement very carefully because the last thing you want to do is create problems for yourself that commence with any insecure feelings for you or your potential partner in this arrangement.
Third, remember you are in the power position—you are paying the check. There are outsourcing providers out there who think they are the real “player.” (In case you were not aware, the latest terminology requires that we HR professionals consider ourselves players—a word that suggests a more powerful status than being “invited to the table.”) The potential outsourcing provider needs to acknowledge this fact. She wins by making you look good. Don’t make it complicated, and be sure they don’t either. If they do, you need to find new potential partners.
Fourth, consider the whole process an ongoing negotiation. Before the contract is signed—if possible, have your folks compose the initial draft—continue negotiating. After the contract is signed, don’t stop negotiating. Keep in mind all the while that the relationship is more important than the transaction or any of its elements.
Fifth, have a good time. You should enjoy the entire process. Reaching out to an organization that generates revenues and profits from activities that your organization labels as expenses should be a win-win that allows you to be more effective as you grow professionally. Think top-level services from subject matter experts. This is an opportunity for your organization to get superior-level performance from labor-intensive activities that generate organizational-wide, top-quality customer service satisfaction. But you need to keep in mind that to get to that level requires a time-consuming effort right from the start. Initially, that demands employing negotiating prowess. How do you become such an expert? Look for opportunities to start doing so today.