Navigating the perilous transition of functions in HR outsourcing is absolutely essential to success, according to this reprise of an outsourcing column that first appeared in November 2005
Complex and perilous are just two of the many words frequently used when referring to the transition of processes from client to service provider in an HR outsourcing contract. In fact, we know of one project team that distributed copies of the Lord's Prayer as part of their transition-planning kickoff. Certainly there are some steps that can be taken to make the journey less painful and more predictable.
Our research shows that companies choosing to outsource HR are finding the transition process highly problematic and full of unforeseen issues. More than half of those we queried said they were not properly prepared for the rapid succession of transition teams, delivery people, documentation needs, knowledge transfer, communication teams and other elements of provider transition.
This juncture of the relationship is absolutely key to the overall health of the partnership between the client and the outsourcing provider, and invites careful and purposeful reflection on doing a better job of planning and understanding transition.
One of the axiomatic rules in HRO is that bad transitions lead to bad operations. Initial operating errors can have two consequences:
* A watchful HR organization begins to perceive that the provider's service levels are not being met; and
* Error reversal and make up services cause deterioration in other services and require additional resources to get back on track.
Since this occurs right at the beginning of the transition, confidence is destroyed and perceptions of poor service occur immediately in the relationship.
Transition is not merely about moving process parts to the outsourcer. To be truly effective, the transition team needs to thoroughly understand the transitioned process. This means not only the steady process steps, but also the "peaks and valleys" of the process. For example, the resources necessary for health-benefits administration are going to increase markedly during annual open enrollment, and that part of the process must be carefully documented to enable the provider to plan resources effectively.
Companies need to schedule a series of workshops with the provider to understand the exact phases of transition and the timeline for each. Each step of effective transition should be carefully scheduled and planned, and include at least the following steps for each process:
* Detailed documentation of the "as is" process,
* Delineation of the process steps to be transferred,
* Knowledge transfer through job shadowing,
* Parallel runs and process "take-on,"
* HRIT and applications turnover to enable process transfer,
* Cut-over and go-live planning,
* Audit and debugging by process leaders in the client company, and
* Constant learning and training by the provider of its resources to capture on the job learning as issues occur.
Transition planning must be understood as a fundamentally important step in the relationship, and both parties must put the right amount and quality of resources into the process.
Lowell Williams is human resources practice leader for EquaTerra, a leading BPO consulting firm located in Houston. He can be reached via e-mail at Lowell.Williams@EquaTerra.com.