Assess HR Outsourcing
Insourcing, Consulting, or Outsourcing – it is not a black and white decision.
RETIRED CONTENT
Please note that the content on this page is retired. This content is not maintained and may contain information or links that are out of date.Failure to assess and manage HR outsourcing results in:
- Outsourcing strategic components of HR that should remain internal.
- Selection of an improper vendor and service levels falling below expectations.
- Demoralized internal staff due to lack of communication.
- Increases in HR costs.
A clear rationale for HR outsourcing and vendor and change management strategy will result in:
- A conscious decision on whether HR outsourcing is or is not appropriate for your organization.
- The ability to explain a thought-out rationale around HR outsourcing to the business unit.
- The ability to improve HR performance by gaining expertise and accessing technology, and the ability to be more strategic internally.
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Module 1: Make the Case
The Purpose
- Understand the value of assessing whether to outsource aspects of HR or not.
- Understand the benefits and reasons for outsourcing.
- Understand the risks associated with outsourcing.
Key Benefits Achieved
- Gain a clear definition of HR outsourcing.
- Avoid misconceptions.
- Avoid "insourcing" – outsourcing critical components and then having to bring those areas back in-house.
Activities: | Outputs: | |
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1.1 | Discussion to set up an understanding of what is meant by HR outsourcing |
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Module 2: Identify Your Pain Points
The Purpose
- Identify your current state of HR and compare it to your target initiatives that align with your business goals.
- Examine areas of weakness within HR’s core functions.
Key Benefits Achieved
- Understand the areas that require focus for improvement to obtain your target state.
Activities: | Outputs: | |
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2.1 | Review of current level of operations and projects in HR |
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2.2 | Definition of future goals and initiatives for HR |
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Module 3: Assess the Appropriateness of Outsourcing
The Purpose
- Determine which areas identified by your gap analysis are key candidates for outsourcing.
- Improve performance levels internally if a function is deemed unsuitable for outsourcing.
Key Benefits Achieved
- Gain advice on what should be outsourced and what should remain internal.
- Gain tips and best practices to improve identified areas of weakness.
Activities: | Outputs: | |
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3.1 | Interpretation of the gap analysis results |
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Module 4: Decide what HR Functions Are Candidates for Outsourcing
The Purpose
- Calculate the TCO for different sourcing options.
- Evaluate risks and benefits of sourcing options.
- Make a decision on which aspects of HR should be considered for outsourcing.
- Build a business plan to support your decisions around HR outsourcing.
Key Benefits Achieved
- Gain a clear cost estimate for outsourcing vs. keeping it internal or consulting.
- Ability to compare benefits and risks to make an informed go/ no-go decision.
- Creation of materials to communicate decisions to both the business unit and members of HR.
Activities: | Outputs: | |
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4.1 | Cost calculation |
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4.2 | Evaluation of risks and benefits |
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4.3 | Making final decisions on which components of HR should not be outsourced and which are key candidates |
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4.4 | Building the business case |
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Module 5: Select a Vendor and Manage Your Outsourced Assets
The Purpose
- Identify the correct vendor that can meet the specific needs of your organization.
- Understand the importance of an RFI/RFP process.
- Understand vendor management and change management best practices.
Key Benefits Achieved
- Selection of the correct vendor for your needs.
- Strong vendor management practices to ensure that SLAs are being met.
- Good change management and communication to help ensure the outsourcing engagement is successful.
Activities: | Outputs: | |
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5.1 | Discuss importance of vendor selection and vendor management best practices |
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5.2 | Define expectations and criteria for evaluating the HRO providers |
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5.3 | Anticipate and mitigate potential in-house challenges |
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