Managing the outsourcing headache

Business Editor Guy Matthews explains how to manage human resources in an era of outsourcing and outside contracting

An inevitable consequence of any economic downturn is that it prompts boardrooms everywhere to consider outsourcing company functions to a third party. This decision is usually driven by both a need to save money and to focus the efforts of those who remain around the organisation’s core activities. Human resources is a department often targeted for outsourcing to a services firm, and if the whole HR function isn’t parcelled off, then large chunks of it – such as pensions management and payroll – often are. It may well fall to the remaining HR team to oversee the company’s relationship with the outsourcing services provider or providers. An outsourcer is an independently managed company, for sure, but there’s still a necessary linkage between them and the organisation that hired them.

HR will need to do whatever is within its power to ensure that the right calibre of people is performing the outsourced tasks. The HR department will want, after all, to be sure that the people doing all the outsourced tasks are properly qualified and appropriately managed to the same high standard. Customers will expect nothing less, never mind senior management.

Managing freelancers

Related to the outsourcing trend is the modern corporate tendency to seek economies and flexibilities by making increased use of contractors and freelancers to do jobs that would once have been salaried. It is a challenge to ensure both high quality output and a cohesive corporate spirit when managing a succession of ever-changing strangers based in different locations. The time and money saved may seem suitable compensation in the mind of the CFO, but it all looks very different if you are HR director.

If it is within the remit of HR personnel, they must do their best to ensure that these part-time or freelance contracts do not simply go to the cheapest person. Any freelancer should be expected to offer a proven track record and share examples of work, as well as testimonials and references. Should a freelancer be offered a small project to begin with to assess their suitability for a bigger project?

Keeping contact

HR ought to feel within its rights to insist on having a hand in the freelance hiring process, unpopular though this may be with other line managers who might assume the role of HR is entirely inward-looking. At the very least, where other managers insist on doing the hiring, HR should ask that they pass on a clear brief that sets out a list of expectations to all would-be contractors.

After the hiring is done, then HR’s role is, as always, primarily one of communication. HR may wish to consult colleagues with responsibility for networks and communications to see that clear and consistent lines of dialogue are open between HQ and every external services provider. In the era of social media, real-time video conferencing and instant messaging, this consistency can be hard won. But at least we are past the days when a freelancer could hide and claim not to know they were being urgently sought.

“If it is within the remit of HR personnel, they must do their best to ensure that these part-time or freelance contracts do not simply go to the cheapest person.”

Reaching out

Managing human resources may be a more complex job than ever, but it doesn’t need to descend into micro-managing every aspect of a scattered workforce. A spirit of camaraderie and esprit de corps is essential, even to an enterprise where half the people now work for an outsourcer and half the remaining work is done by outsiders. HR should do its best to encourage bonding and fun.

Remote workers in particular may positively welcome this. After all, working at home in your spare bedroom may come with certain freedoms, but it can also be lonely. If your employer’s HR people reach out to you once or twice a year for a word of cheer, inviting you for lunch perhaps, then much goodwill can be won. If this gets the job done better – well, isn’t that the point of having an HR department in the first place?

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John Carroll - Helping businesses achieve International success. Head of Product Management & International Business, Santander UK