HR’s Role in Outsourcing

An organization may decide to outsource certain functions, such as customer service, by transferring roles to an outside company. Outsourcing helps the organization reduce payroll and operating costs and free up resources for other purposes. The organization relies on its human resources (HR) department for negotiations and communications with the outsourcing company for a smooth transition for the organization as well as the new team.

Analysis

When an organization considers transferring its functions, it may hire an outsourcing consultant to work with the HR department and the organization’s management team. HR helps the team analyze departments which may be under-experienced, such as applications development in IT, or have unmanageable workloads such as printing in the administrative function. HR helps the team determine if a change in structure and the addition of outsourcing will help the organization in its productivity.

Background Checks

An organization relies on its HR department to conduct background checks to find an outsourcing company qualified to handle the organization’s functions. HR looks into the type of industries the company has experience working with, the type of workload their staff are accustomed to handling and their ability to meet deadlines. It’s the role of HR to thoroughly screen the companies before giving the organization the hiring go-ahead.

Proposal Review

Once an organization has selected an outsourcing company, HR reviews the proposal with the knowledge and experience to identify problems with outsourcing such as redundant positions, employees’ skills which do not match the organization’s requirements, inaccuracies in contractual terms of employee salaries and hidden costs. HR also ensures that the outsourced company receives accurate information to represent the company in its operations.

Employee Benefits

Some HR administrative functions, such as payroll and employee benefits, may be outsourced in an organization. But, outsourcing doesn’t always eliminate the HR department. It can bring about additional responsibilities such as managing the client relationship. HR communicates information on the rights and responsibilities of both parties. In addition, it ensures that the outsourcing company meets the organization’s compliance requirements by monitoring its activities periodically and conducting annual performance evaluations.