HR Outsourcing Association (HROA) tries to make this task easier for HR managers.
With the market for outsourcing HR functions so diversified it is often difficult for those in HR to get an objective overview of what’s available in the market. HR Magazine spoke with Richard Crespin, the association’s Global Executive Director, about what they hope to achieve.
What is the primary goal of HR Outsourcing Association (HROA)?
The simple answer: to make HR outsourcing easier and more effective. This in turn means users can achieve faster and greater returns on their investments. HR touches virtually every part of an organisation and efforts to improve HR can have tremendous benefits for employees, employers and investors. Our goal is to unleash the wisdom of the HR outsourcing community. What do I mean by that? By sharing the insights of a community of people who have traveled the road already, and those about to start, we build an environment for collective learning. We harness that power to set standards, share best practices, create new tools and techniques and celebrate excellence.
Why focus on Asia now?
As a member-driven association, we live to support our members and their needs. We’re responding to the demand created by our members in other parts of the world. We started almost simultaneously in Europe and North America and have worked hard to absorb the massive growth in this field. We have now put in place an infrastructure to support a worldwide membership. For the past few years our members have demanded a presence for the association in Asia to support their continued growth in this region.
What do you feel are the main challenges for HR departments in this region?
Pretty much the same challenges that face any business in the region: the size of the geography, the diversity of languages, and the complexity of different legal and regulatory regimes. There is no 'one' Asia, there are many sovereign nations each with its own language, culture and legal constructs spread out over a vast territory. For the HR professional working in a business spanning multiple Asian countries that means running multiple payrolls, multiple benefits programmes, multiple HR administrations and the list goes on.
I think these innate complexities are compounded for HR departments that are part of multi-nationals. If the HQ lacks an Asian perspective it can make for a very frustrating experience. American and even European executives are used to working with a single legal framework; this is not the case in Asia.
Do you feel that outsourcing has redefined the profession of HR?
Yes, it has created increasing opportunities for the HR executive to be more strategic. Traditional HR thinking throws together two very different ‘brains’: the administrative and the strategic. HR executives are asked to be extremely detail-oriented, process-driven and quality conscious while simultaneously thinking long-term about the ‘human condition’ within the organisation. When they run payroll, or process benefits, or maintain HR records they essentially run complicated assembly lines. Simultaneously these same professionals are asked to be empathetic strategic thinkers. They have to develop effective strategies to attract and retain talent and structure compensation programmes, as well as being an advisor to their CEO on workforce strategy. HR outsourcing offers the potential to handover the ‘assembly-line’ to experts—leaving them more time to focus on strategy.
What changes in the HR industry do you anticipate in the future with advances in technology?
Technology continues to shrink time and space and it will continue to do so in HR. Right now if I have a problem in Boston and a person in Bangkok that can solve it; the barriers of geography, tax laws, employment laws etc can stand in my way.
Ultimately, I think technology will help us break down these barriers. Geography won’t change and the laws might stay the same, but through better technology the compliance and administration will get taken care of ‘in the cloud’ allowing executives to focus on solving problems by finding and applying the right talent, regardless of where it resides.
Can outsourcing HR functions work in small as well as big companies?
Absolutely! In fact, in the US and Europe you rarely see new companies start with internal HR departments. It’s almost assumed that many of the basics of HR including payroll and benefits, will be outsourced from the outset.
Small companies can be nimble and use off-the-shelf solutions from the very beginning.
Large companies offer a lot of scale and volume, making it worthwhile for HRO providers to invest in customised solutions for them. Most complexity is in the middle.
Mid-sized companies often have all the complexity of a large company without the ability or willingness to take pre-packaged solutions.
The good news for mid-sized companies is that more and more vendors now recognise these issues and are looking at effective solutions. The HROA has a dedicated special interest group for mid-sized companies to take this process forward.
How can HR directors best measure the effectiveness of an outsourcing programme?
Three simple things: employee satisfaction, cost savings and quality improvements.
Based on your experience what advice would you give to HR professionals wanting to outsource more of their current HR functions?
Don’t go it alone. There’s a vast community of people who have already gone down this road. Tap into them and you’ll find the journey more rewarding, faster, and easier.
Paul Arkwright
Publisher
