Our Editorial Advisory Board (EAB) is an elite group of senior players in our industry. Each member is an expert in a very precise niche. At the same time, the fundamental qualification for membership is breadth beyond expertise. We actively recruit seasoned leaders who have a definite point of view.
Every couple of months, we create a virtual brainstorming session, the HRExam Poll. Each member is asked to respond succinctly to a topical question. The answers always paint a picture of the state of the industry.
This month, we asked, “What is the one HR Silo that should be outsourced and what is the one silo that should never be outsourced?”
Fourteen members of the EAB weighed in.
Taken in its entirety (and we’ll be publishing all of the input on Wednesday), show massive general agreement on the principles and practice of outsourcing. The members of the EAB unequivocally held to two simple principles:
If it is repeatable, it can be outsourced. Anything that does not generate significant, measurable strategic value should be considered for outsourcing.
Things are changing more rapidly than it appears. Once upon a time, in the not too distant past, outsourcing was the bane of the HR Department. Today, the question is not ‘how to outsource’ but ‘when’ and ‘how best to manage it?”
Outsourcing is so common that we don’t even usually call it that.
Using Software as a Service (SaaS) is an outsourcing decision. Software had to be licensed and then installed on servers paid for with internal capital. Today’s subscription models place the capital burden and risk management squarely on the shoulders of the vendor.
Even more interesting is the way that large SaaS providers are becoming providers of a broad range of integrated services through the same subscription business model. Any more, software comes populated with data and the people who interpret it. These costs used to be a part of headcount.
The untold story is that HR requires new management skills and techniques. Operating in a world where basic work is done through subcontracts and subscriptions requires different approaches. You can not treat a vendor the way you can treat a subordinate (though plenty of people are trying).
In the aggregate, our EAB found that any process worth doing well is worth outsourcing.
Tomorrow: some surprising nuance in the findings.