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    Is Your HR Outsourcing Partner Geared For Success

    Is Your HR Outsourcing Partner Geared For Success?

    Oct 25, 2021 | Smart Outsourcing & Right Fitment

    The popularity of the HR outsourcing industry in India started at the turn of this decade, with organizations looking to optimize cost, drive standardization, and provide a superior employee experience. Managing relationships between organizations and service providers have become increasingly complex because both parties may have different desires and agenda when developing and maintaining HR outsourcing relationships.

    The Success of HR Outsourcing Delivery Is Impacted by Factors Such as:

    • The rationale for HR outsourcing and the capabilities of the potential vendor
    • Complexities and range of HR processes being outsourced
    • The extent to which processes are automated
    • Quality of workforce and attrition levels for the service provider.

    The critical question is what can organizations do to ensure successful delivery by the service provider. Existing research suggests that maintaining partnership quality with service providers is one of the most neglected priorities for HR and this impacts the service quality and success of HR outsourcing. Integral partnership components like trust, business understanding, and communication, which can greatly improve the success of HR outsourcing service providers, is lacking today. In contrast, in general, service quality was found to moderate these relationships partially. (Abdul-Halim, & Ramayah, 2013)

    Both the partnership quality and service quality can be easily measured, and suitable interventions can be planned to enhance these parameters. Organizations can further enhance their HR outsourcing success by:

    Process Re-engineering and Use of Design Thinking

    Unfortunately, most HR processes have become phenomenally complex with multiple touchpoints. Outsourcing the process as-is will result in higher complexity as an additional layer of outsourcing vendor gets added. The use of design thinking to make the process simple, human-centric, and agile will help in easier administration by the vendor. 

    Investing in Automation and End-to-end Integration

    Though benefits of automation by using new-age technologies like chatbots are well-known, the key differentiator is the end-to-end integration between parent HR software suite and add-on suites for recognition, performance, and career management, etc. The use of multiple HR suites without proper and seamless integration will result in manual transactions that complicate work for the vendor. 

    Changing Mindset From Vendor to Partner

    The biggest challenge is changing the mindset of organizations to treat vendors as “partners.” The organization can co-create HR processes with the partner for easier implementation. Further, they can invest in building partner’s technical and process capabilities and define appropriate recognition mechanisms for joint success. If organizations can follow the above-mentioned steps, they will be able to make the most of the services offered by HR service providers and integrate them seamlessly into their existing business processes. Eventually, you need to consider your business, talent, and cultural objectives to choose the best service provider and work with them as a partner to achieve the desired goals.

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