The difference between outsourced and in-house

by 06 Feb 2007

Q. I’m an HR assistant with two years’ experience in healthcare and an MA in HRM. I have been offered a role in an investment bank, working through an outsourcing company. The role sounds great from an HR perspective but my job title would be on-site customer service consultant. Would working for an outsourced HR department affect my future in HR? Would I be doing similar things to an in-house role?

A. Many organisations strategically implement outsourcing solutions to streamline transactional services within the HR function – for example, recruitment, payroll and HR administration. Outsourcing these services allows HR professionals within the business more time to effectively partner with business leaders on strategic HR issues impacting future organisational success. Some organisations chose more sophisticated outsourcing solutions incorporating end-to-end strategic HR service offerings. Consequently, the experience gained within an outsourced HR department would significantly depend upon whether the outsourcing solution provided to the investment bank was an end-to-end generalist HR function or alternatively a solution that predominately focuses upon a specific transactional HR service.

Regardless of the nature of the outsourcing solution, you will be completing tasks that will be similar to duties of the in-house HR role. However, the difference will lie in the depth and breadth of experience you gain to diverse HR functions. If you are working within a team that provides a specialist HR function, in all probability you won’t get exposure to other HR functions within the organisation. You may also miss out on the opportunity to gain exposure to the implementation of strategic HR initiatives and broader business strategy as these duties are undertaken by in-house HR professionals. This may not always be the case; it will entirely depend on the structure of the outsourcing solution. Deciding whether an HR role within an outsourced HR team is the right step for you will depend on the content of the role and the exposure the role will have to the broader goals of the organisation.

In considering the merit of this position, it is important to gain a strong understanding of the duties the role will entail and the diversity of experience you will gain. The position title of this role would suggest that as an on-site customer service consultant you will work as part of a centralised service team responsible for providing first point of contact advice to employees and managers on HR policy and procedures across the business. The experience you gain within the centralised service centre is highly regarded by future employers as these roles expose employees to a diverse range of transactional HR enquires which help build strong HR advisory skills within a high volume, fast-paced environment. HR service centre roles are also known for developing employees’ HR administrative capability, HRIS knowledge, problem-solving skills as well as legislative awareness.

In centralised service centre roles the majority of your contact with the business will be conducted by telephone or email. You will provide point in time advice, such as “what is our policy on maternity leave?” and “how do I complete my online performance appraisal?”, but generally you will have limited exposure to strategic HR planning or HR implementation within the specific business units. Centralised HR service centres are typically isolated from the business and the HR business partners who are aligned to the business units.

It is worth noting that without a clear development plan from the service team through to a business partner role; there can be a glass ceiling for development in centralised service centre roles due to the nature of the HR structure. You will typically escalate employee relations issues and complex HR enquiries from managers and employees through to HR business partners who are aligned to the client group. Consequently it is difficult to gain a sound understanding of the HR issues affecting the business units and how they are resolved. You won’t typically gain experience in coaching managers on managing disciplinary actions and grievances and will not get the opportunity to see these issues through to resolution.

As an HR assistant with two years’experience you need to actively manage your development to ensure that in future roles you gain face-to-face HR advisory experience and diverse experience across the generalist functions. Exposure to resolving employee relations issues will be significantly important when you want to take your next step into a consultative role. Without this experience, progression into HR advisory and consultant positions will be challenging.

By Sarah Burn, The Next Step


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