Post on 06-Aug-2015
All you want to know about HR outsourcing
by Toronto Training and HR
July 2015
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CONTENTS3-4 Introduction5-6 Definitions7-10 Research from 201411-13 Key trends for 201514-16 HR outsourcing17-18 Factors affecting HR outsourcing decisions19-24 Criteria to determine core HR processes from
non-core25-26 How HR is changing27-28 Metrics for HR outsourcing29-33 Cost-benefit analysis of HR outsourcing34-37 Selecting a HR outsourcing provider38-39 Traps to avoid with HR outsourcing40-43 A three phase process44-45 Outsourcing service efficiency46-47 Areas to consider with outsourcing48-49 Outsourcing around the world
50-51 Conclusion, summary and questions
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Introduction
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Introduction to Toronto Training and HR
Toronto Training and HR is a specialist training and human resources consultancy headed by Timothy Holden 10 years in banking15 years in training and human resourcesFreelance practitioner since 2006The core services provided by Toronto Training and HR are:
Training event designTraining event deliveryHR support with an emphasis on reducing costs, saving time plus improving employee engagement and moraleServices for job seekers
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Definitions
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Definitions• Outsourcing• Subcontracting
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Research from 2014
Research from 2014 1 of 3
• 12-26% growth• IT outsourcing• E-discovery services in
legal outsourcing• Asset and lease
management services in real estate and facilities management
• Billing in finance and administration
• HR administration and HR reporting in HR
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Research from 2014 2 of 3
• Respondents not in favour of legislation
• Expanded data privacy regulation could reduce outsourcing
• India continues to represent the primary destination for offshoring
• Technology advancements will diminish but not remove the importance of location of service delivery
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Research from 2014 3 of 3
Drivers of the decision to outsource services• G7• BRIC• Global
• Obstacles to outsourcing
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Key trends for 2015
Key trends for 2015 1 of 2
• It’s no longer primarily about cost
• Nearshoring is becoming more prevalent
• Outsourcing is increasingly applied by function
• Outsourcing is expanding among mid-sized operators
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Key trends for 2015 2 of 2
• Outsourcers and clients are competing with each other over top talent
• Structures and processes are becoming more formal
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HR outsourcing
HR outsourcing 1 of 2
• What could be outsourced
• Advantages of HR outsourcing
• Disadvantages of HR outsourcing
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HR outsourcing 2 of 2
Making outsourcing a success• Rethink the cost
mindset• Establish trust• Trust vendors as
partners• Explore the idea of a
reverse service-level agreement
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Factors affecting HR outsourcing decisions
Factors affecting HR outsourcing decisions
• Employer size• Financial pros and
cons• Strategic issues
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Criteria to determine core HR processes from
non-core
Criteria to determine core HR processes from non-core 1 of 5
• Tacit knowledge• Core-related
specificity• Strategic criticality• Social complexity• Causal ambiguity
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Criteria to determine core HR processes from non-core 2 of 5
Types of HR activity• Ancillary activities• Routine activities• Activities containing
the potential for achieving economies of scale
• Activities requiring specialized knowledge
• Activities requiring broad organizational knowledge
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Criteria to determine core HR processes from non-core 3 of 5
Types of HR activity (cont.)• Activities requiring
high confidentiality• Activities requiring
specific management decisions
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Criteria to determine core HR processes from non-core 4 of 5
HR competencies• Performance
capabilities• HR technical acumen• Business acumen
• Competencies required by HR professionals
• Soft skills• Business skills• Technical skills
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Criteria to determine core HR processes from non-core 5 of 5
Unbundling HR activities• Activities aligned with
business units• Activities of
overarching corporate interest
• Activities that can be placed anywhere
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How HR is changing
How HR is changing
• Traditional v future• Nature of HR
program and function
• Creation of HR strategy and policy
• Organization of the HR function
• Profile of the HR professional
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Metrics for HR outsourcing
Metrics for HR outsourcing
• Traditional quantitative
• Current qualitative
• Next generation
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Cost-benefit analysis of HR outsourcing
Cost-benefit analysis of HR outsourcing 1 of 4
Satisfaction• Efficiency level
of employee satisfaction with the planning, implementation and follow-up of the applied personnel integration methods
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Cost-benefit analysis of HR outsourcing 2 of 4
Learning• Achievement
efficiency level of the intended learning objectives of the implemented staff integration method
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Cost-benefit analysis of HR outsourcing 3 of 4
Typical valuation criteria• Introduction
brochure• Checklists• Initiation rituals• Orientation
meeting• Mentoring• Storytelling• Action learning
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Cost-benefit analysis of HR outsourcing 4 of 4
• Hard costs• Opportunity costs
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Selecting a HR outsourcing provider
Selecting a HR outsourcing provider 1 of 3
• Understand the existing HR service provision including the cost base, responsibilities and level of service
• Understand the organization’s own future requirements
• Establish a shortlist of preferred suppliers
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Selecting a HR outsourcing provider 2 of 3
• Communicate with other organizations with which the outsourcing providers currently have contracts
• Consideration of ‘fit’ with provider organization, which might include cultural as well as geographical factors
• Identification of the ‘actual’ person who will be the key relationship manager
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Selecting a HR outsourcing provider 3 of 3
• Determine preferred contract length
• Build in contractual flexibility where possible
• Stay involved in the contracting process
• Identify metrics (including benchmarks of acceptable and unacceptable ranges) to be included as part of any service level agreementPage 37
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Traps to avoid with HR outsourcing
Traps to avoid with HR outsourcing
• Get recommendations• If you don’t like your
service, change• Have a
communications plan• Know the risks• Don’t rush
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A three phase process
A three phase process 1 of 3
Preparation• Create business
case for change• Assess industry
landscape• Write the RFP• Launch the RFP
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A three phase process 2 of 3
Selection/negotiations• Review the bids• Conduct due
diligence• Review and select
the vendor• Negotiation and
contract signing
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A three phase process 3 of 3
Implementation /governance• Communication• Transition• Governance
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Outsourcing service efficiency
Outsourcing service efficiency
• Assess• Prepare• Evaluate• Commit• Transition• Optimize
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Areas to consider with outsourcing
Areas to consider with outsourcing
Benefits and risks• Flexibility• Cost• Service
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Outsourcing around the world
Outsourcing around the world
Top ten• India x 8• Philippines x 2
Top in the Americas• San Jose, Costa
Rica
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Conclusion, summary and questions
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Conclusion, summary and questions
ConclusionSummaryVideosQuestions