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FEBRUARY FLASH NEWSLETTER
FAR February Luncheon
"Outsourcing HR as a Leadership Option: What Do I Need to Know Now?"
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| L to R: Simone Putnam, Paul Phelan, CFP, and Sidney Abrams |
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The pressures of tight staff budgets and the increased demands being placed on finance and administration executives to lead the HR function bring the option of outsourcing to the forefront. But does it really deliver on bottom line savings while still preserving an organization's culture? Paul Phelan, Employee and Executive Practice Leader at Early, Cassidy & Schilling, LLC, moderated a discussion with panelists Simone Putnam, partner at Raffa; Sidney Abrams, Policy and Audit Practice Leader at HR Consulting Services; and FAR's members and guests at its February luncheon program.
With an array of outsourcing services available, many boards and CEOs may be tempted to say, "We don't need HR." Today's panelists agree that no organization is without an HR function, and attention to its mission and its execution is essential to an organization's success. Still, situations and circumstances often suggest that there are better ways for the in-house HR function to perform. When the HR director's position changes frequently, when there's low staff morale, when staff needs to train for a data conversion, when the in-house counsel alerts the executive team to a potential lawsuit - it's probably time for the experience and perspective of an outside consultant.
Ms . Putnam and Mr. Abrams outlined the variety of arrangements available from HR consulting firms that range from on-site, long term support to time-limited project support. Some examples include employee relations and staff policy handbook preparation, on-boarding and out-placement, re-design of workflow to benefits administration and retirement planning. It's unusual for an organization, especially small to mid-sized nonprofit organizations to have in-house expertise on many of these, while consulting groups offer a pool of experts capable of assessing, advising and supporting the solution to a given HR issue.
Mr. Phelan asked, "What are the efficiencies? Does out-sourcing help the bottom line?" Both Mr. Abrams and Ms. Putnam advised the audience not to consider outsourcing as a way to save money. The benefits of a contract, however, may well outweigh its costs. If out-sourcing reduces staff turnover, improves the efficiencies of the workflow, reduces exposure to legal actions, and allows the executive team to spend more time on the organization's mission and less on HR issues, the value of the contract becomes obvious.
Members of the audience shared successful examples of out-sourcing contracts and raised several questions, reflecting technical and leadership concerns. The panel discussion concluded with Ms. Putnam's caution as members consider whether or not to out-source: "You can't take the HUMAN out of HR!"
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