Assess HR Outsourcing

Insourcing, Consulting, or Outsourcing – it is not a black and white decision.

Onsite Workshop

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.

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:
1.1 Discussion to set up an understanding of what is meant by HR outsourcing
  • Overview of risks and benefits

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:
2.1 Review of current level of operations and projects in HR
  • Prioritize areas that require focus for improvement
2.2 Definition of future goals and initiatives for HR
  • Use the output to complete an Options Analysis

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:
3.1 Interpretation of the gap analysis results
  • Identification of which components of HR should be further investigated as opportunities for outsourcing
  • Advice for which components of HR should be kept internal

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:
4.1 Cost calculation
  • Options Analysis Dashboards for each core area of HR
4.2 Evaluation of risks and benefits
  • SWOT analysis
4.3 Making final decisions on which components of HR should not be outsourced and which are key candidates
  • Final decisions on HR outsourcing
4.4 Building the business case
  • Business Case

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:
5.1 Discuss importance of vendor selection and vendor management best practices
  • RFI/RFP
5.2 Define expectations and criteria for evaluating the HRO providers
  • Identification of SLAs
5.3 Anticipate and mitigate potential in-house challenges
  • RFP proposal evaluation grid

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