Out of the Door…

It’s like the case of a home-maker who’s so caught up in routine
housework that she forgets to stand up and listen to what her family wants. Or
that of a team leader who is so involved in getting the paper-work right that he
loses out on motivating his people. How often have you seen HR managers battling
with piles of resumes, appraisal and compensation issues, so much so that the
key function of ‘motivation’ is lost.

However, the HR function is steadily growing in importance and HR heads are
finally breaking the bastion to enter the ‘core teams’ in companies. In such
a scenario, the idea of handing over mundane functions to an external agency
certainly is appealing. Even more important, from the companies’ point of
view, outsourcing works out to be a more cost-effective option. HRinIndia
recently organized a discussion to debate the issue. The discussion was held at
the Dabur premises in New Delhi.

To begin with, unlike the security and canteen facilities in offices, can HR
be outsourced? "Anything that can be benchmarked and bundled as a com-modity,
it can be outsourced. Given the obvious cost benefits involved, the question I
would raise is why not outsource? Anything that is a more economical alternative
for a company, especially during these troubling times, must be adopted,"
says NK Mansukhani, president and CEO, Transcorp International. For with
outsourcing, overheads like office space, support staff etc get passed on to the
vendor as well.

Looking Out
	Key HR functions that can be outsourced
	Attraction of talent/recruitment
	Administration/salary-related matters
	Retention of employees
	Motivation of employees/ building leadership
	Exit interviews

But the idea of outsourcing brings with it a fear of trusting the vendor.
"Don’t companies trust auditors with sensitive company data? And if a
case of misuse does occur, there will be legal provisions as companies always
sign a contract with the external agency," points out G Rao, GM (HR) Desein
International.

Recruiting and training have been outsourced a lot of times. Counselling in
fact works better if it is done by an external agency.

For instance, companies who bring in external HR consultants to conduct exit
interviews have found that exiting employees are more honest with them.

This is especially so in sticky situations like an employee leaving the
organization because of unhappiness with other employees or an immediate boss.
In such critical situations, third party counseling would does help.
"However, this requires the company to display implicit faith in the
consultant," says Parul Diwan, HR manager, Merisant India. Others believe
that HR is best practised at the line managers’ end.

Given that employees interact with their immediate superiors far more than
with the HR department, in most cases, employees would prefer to confide in the
former in case of a problem. Sanjiv Bhikchandani, CEO of Naukri.com says that at
Naukri, in cases which involve a good employee wanting to leave, the matter is
brought to the notice of the top management and there is a discussion with the
employee. ‘‘All this is done by the line manager. In fact for an
organization of nearly 150 people, we have only one HR person. We may have one
more–never more," he says.

The phenomenal growth of public relations agencies across the country is
another example of outsourcing. By using a PR agency, a company does not
undermine the role of its corporate communication department. In fact, the
agency provides better infrastructure and resources to execute the company’s
communication strategy without having an army of communication experts on board.
HR managers could easily assume a similar role, of being the point of contact
with an external agency that executes all the company’s HR operations. So,
with outsourcing HR practices becoming a trend, is there a threat of the HR
manager losing his/her job? "Not likely" says HCL Infosystems vice
president (HR) M L Taneja. Is there a threat of the support staff, which has
traditionally handled the paper-work for performance appraisals, payrolls etc,
losing out? "Possibly," says Taneja suggesting that a good company
could look at passing on its support staff to the outsorcing agency it appoints.
And why not. After all, these are people matters…

Manjiri Kalghatgi in New Delhi