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Study: Being Strategic Presents HR Challenges
HR business-process outsourcing is supposed to free up HR professionals to take on more strategic tasks. A new study, however, finds that adoption of HR BPO is outpacing the skills and expertise of many in HR.
The strategic demands on HR executives may be outpacing their abilities. So says a recent analysis by the Chartered Institute of Personnel and Development, a United Kingdom-based membership organization composed of British HR professionals. The study found that ongoing changes to the structure and responsibilities of the human resource function -- particularly the growth of outsourcing and the increasingly strategic roles departments are being asked to play -- are outpacing the skills development and staff expertise of many HR organizations. "Fragmented careers are arising as a result of the separation of service centers, centers of expertise and business-partner roles," says Duncan Brown, the CIPD's assistant director general. "We need to think through how the different parts of the function work together effectively and how we enable staff to develop a broad enough perspective of all the function does." If the HR profession fails to address these questions, the gap between HR's desire to add strategic value and its ability to deliver it will only grow, warns Brown. The CIPD analysis was based on results of a survey it conducted of 1,833 of its members last year. Several U.S.-based experts say HR departments on this side of the Atlantic are undergoing similar challenges. Steve Lutz, executive vice president at Aon Consulting in Chicago, says companies that outsource most of their transactional HR functions expect the "retained" HR organization to have a much more strategic focus. However, HR leaders are somewhat hindered in this area because there are still relatively few "success stories" to serve as examples, he says. "People are just now starting to understand what the impact of [large-scale] outsourcing will be upon the organization," he says, adding that the Society for Human Resource Management and HRO buyers' groups can help direct HR leaders to learning resources as their staffs make the transition to more strategic roles. Brad Everett, a global client executive at outsourcing-advisory firm EquaTerra in New York, says in many cases, companies that have outsourced most of their transactional HR activities will have no choice but to reach outside the organization for more strategic HR talent. "If HR organizations are really going to contribute to the bottom line, they need to recognize that some of their existing talent is not necessarily capable of managing the new delivery model," he says. "In some cases, companies have reached out to the analyst community, to organizations such as Gartner and Towers Perrin, to find the specialized HR talent they need." Companies that attempt to "make do" with their existing HR staffers risk compromising the benefits of outsourcing, says Everett. "You can't make an individual who's been focused on transactions for most of his or her career into a strategic e-learning specialist who can envision new plans and structures; they simply don't have the experience to draw upon," he says. "[Companies] need to find folks who've actually done it, who can take theoretical learning practices and apply them to practical solutions. And they need to do so speedily -- time is not their ally, in many cases," he says. The upheaval caused by outsourcing and the changing nature of HR's role is, understandably enough, stirring anxiety in many HR departments, says Phil Fersht, vice president of research at the Everest Group in Dallas. "You can see the fear in the audience's faces when we discuss outsourcing at regional HR conferences," he says. "HR execs are proving to be more resistant to the outsourcing process because there's a definitive lack of education and communication in the marketplace about what outsourcing truly is." But rather than fear outsourcing, HR executives should instead take the lead in explaining the pros and cons of HR business-process outsourcing to their CEOs, says Fersht. "It's up to HR to be the educators, and explain to them that there are certain elements of HR that can be outsourced but there are also many potential pitfalls with large-scale outsourcing," he says.
May 15, 2006 Copyright 2006© LRP Publications |
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