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Understanding the state of HR outsourcing

jane simms | people management | 13 December 2016 

PA Consulting’s Carol Haag, a HR sourcing expert, is quoted in an article in People Management. The article looks at whether the end of the outsourcing boom has meant that work is being brought back in-house.

Carol explains that organisations are opting for “a more nuanced approach”. Where they used to think in binary terms – outsourcing ‘transactional’ activities and retaining ‘strategic’ work in-house – they are more tactical about what the experts now call ‘sourcing’ or ‘mixed sourcing’. This reflects a more considered response to demands on HR to be more strategic and add more value.

Carol says: “It’s like having a menu. Everyone likes different things and makes choices accordingly. There has to be a business case for either keeping something in-house or getting an outside organisation to do it, but cost shouldn’t be a determining factor. The reasons for outsourcing may include better compliance or accountability, for example, or standardising something across borders.”

Carol goes on to talk about the impact that technology is having on sourcing decisions. For example, the cross-border standardisation some companies look to outsourcing to provide may be achieved relatively easily in-house through cloud-based HR systems. Carol says these are “a phenomenon” because of their transformational effect. “They are very intuitive and easy to use, but because they are ‘out of the box’ – that is, configurable, but not customisable – you have to use them as they are, which forces standardisation.”

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