HR outsourcing needs purchasers

6 July 2005
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07 July 2005 | Anusha Bradley

Purchasers should have greater involvement in decisions to outsource HR work, a Chartered Institute of Personnel and Development (CIPD) study has found.

Outsourcing of HR is a growth market, but a decision to do so should not be taken lightly, said the report. All departments, including procurement, IT and HR, should be involved.

HR Outsourcing: The Key Decisions emphasised the importance that "all stakeholders are involved, such as procurement, HR and IT, so you have input from specialists in all areas".

While reducing cost and risk and increasing effectiveness were all cited as good reasons to outsource, the report highlighted loss of local knowledge and lack of tailored services as potential pitfalls.

Rebecca Clake, CIPD adviser, said if a firm was considering outsourcing its HR function, a clear supplier agreement and relationship must be established so expectations could be met.

CIPS welcomed the recommendations, saying purchasers were often not involved enough in HR outsourcing decisions.

René de Sousa, senior procurement specialist from the CIPS professional practice team, said because of the strategic nature of the purchasing role, staff should be involved.

"We should be part of the group that makes a decision on outsourcing. We are not as involved as we would like."

The report, published last month, draws on the experience of 17 organisations that have either outsourced HR or rejected the idea. They include banks, public-sector bodies and IT companies.

SMjul2005

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