Outsourcing is not the enemy

THERE’S NOTHING to fear but plenty to consider for Australian HR professionals whose organisations outsource or offshore.

This is one of the key findings of a recent Asia Pacific KPMG outsourcing study. “Australia is going to have to offshore more regardless of whether we like it or not,” said Egidio Zarella KPMG’s Global and Asia Pacific partner in charge, information risk management.

“However, people don’t need to worry about their jobs because there aren’t going to be enough people in Australia to actually do the work.”

The study, Who is conducting the orchestra? explored the state of business process outsourcing (BPO) and information technology outsourcing (ITO) among 102 leading organisations in the region. It found that 95 per cent of the respondents engaged in BPO or ITO irrespective of size or industry classification.

The study found it is likely the HR function in many organisations will become a bigger part of BPO arrangements. “Organisations are going to outsource the whole HR process to an external provider and there is a lot of discussion that people will outsource or offshore to other countries as well,” he said.

“We have seen that trend. We have a lot of global corporates now going to India, the Philippines and also Malaysia and Singapore.”

However, these outsource or off-shore arrangements will only be successful if there is strong contract management involved.

“So if you outsource, for example, your HR function … you still have to have someone who actually knows that function in the organisations to make sure you’re getting the benefits you need,” Zarella said.

“You just can’t put any sort of procurement officer in place, you’ve got to have a strategic HR person.”

In an outsourcing arrangement, Zarella said the HR professional actually becomes more like a consultant, in which they go and work for all the different players.

“The HR focus will be a lot more strategic and very much on the people side,” he said.

“People shouldn’t worry about the back office side. Someone can do it better, letting the HR profession do what they do really well, the front office tasks and looking after the people,” according to Zarella.

“That doesn’t get done enough because they spend most of their time dealing with the mundane stuff.”