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Outlook 2010: Down with Cost, Up with Value

This is part of a special advertising section on the challenges facing HR executives in the coming year.

Friday, October 2, 2009
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In 2010, HR executives will be faced with two seemingly contradictory business challenges:

* Bringing more strategic value to their organizations and

* Reducing HR-related costs

We're seeing these conflicting marching orders being handed out with increased frequency. To rise to these challenges, HR executives must first determine what tasks add strategic value to the organization -- and are therefore core tasks -- and what tasks are more transactional or administrative in nature.

Strategic planning and execution is then maintained within the organization, while tactical or administrative functions are outsourced in an attempt to reduce costs and improve performance. While completing this exercise, the HR executive may also uncover gaps in strategic-level skills of the HR organization that they will need to proactively address.

Managing and Leading

In addition, HR executives will need to identify new ways of managing and leading the global HR functions of their respective organizations. With the separation of strategy and tactics, HR needs to develop new management methods, communication methods and management metrics. These new methods must be streamlined and cost-effective, while simultaneously contributing to the strategic development and accomplishment of the organization's overall business goals.

The selection of outsourced business partners in areas such as benefits administration, recruiting, global-payroll systems and global-relocation services must be carefully managed to ensure a solid cultural fit -- keeping in mind that outsourcing should reflect each corporation's individual needs and not merely be a reflection of the supplier's capabilities.

Due Diligence

In addition, due diligence must be taken to ensure that prospective providers can grow with the organization, and their systems adhere to international security protocols, safe harbor laws, etc. Finally, selected business partners in an HR outsourcing arrangement must be able to provide centralization of the selected outsourced global HR functions, as well as the ability to produce comprehensive global reporting based on the corporation's needs.

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HR executives are in a unique position to clarify the vision and strategy of their respective corporations for future growth. By assisting in the clarification of the corporation's vision and strategy, the HR executive is in a position to engage the business leaders they support in discussions that will steer the organization to future success; that is, by constantly assessing the effectiveness of the HR function, the HR executive will be positioned to promote the overall success of the organization. Specific items of focus for the HR professional in 2010 should include global-workforce planning, global recruiting, structured communication plans and performance-management systems that link to the desired business results.

While recognizing the difficult economic times we are currently experiencing, successful HR executives must work with their corporate leaders to design and position their organizations for the economic recovery ahead. Preserving core competencies today while reducing costs by eliminating unnecessary functions (or outsourcing those that are necessary but non-core) should be current goals for all executives, HR and otherwise.

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