H.R. professionals used to work hard to maintain their usefulness and integrity. They understood that providing personal professional services is particularly complicated when the provider is a friend, a colleague or a boss. Nowadays, however, they increasingly are hard to find.
According to a recent story in The New York Times, “The outsourcing of H.R. has accelerated over the last decade and will continue to do so.” There are several reasons for this. Organizations don’t know how to do it themselves, and often they don’t even know how to evaluate those who do. And then, it’s expensive. Most organizations would rather not hire extra employees to begin with, and the fewer benefits they have to offer them the better.
According to Lisa Rowan, a research vice president at IDC, a market research firm, “While some companies may entrust their H.R. needs to a single outside firm, it’s more common to parcel out functions to a range of outside providers.” The prevailing wisdom—or rationale—for outsourcing such work is that is can “free up a client to focus on its strengths,” said Don Weinstein, senior vice president at a large H.R. outsourcing firm. But when did any organization ever have the luxury of concentrating on its core competency alone?
Many internal H.R. functions have been “cut to the bone,” said Peter Cappelli, a management professor and director of the Center for Human Resources at the Wharton School of the University of Pennsylvania. The idea that companies will be more strategic about human resources after they outsource “requires some heroic assumptions,” said Cappelli. “Supervisors may be able to take over some important roles, but many of the people who were experts at recruiting, training and career development have been laid off,” he said. (See When the H.R. Office Leaves the Building.)
In the past, it was a progressive step for management to regard employees as “resources,” on par with the materials they needed to produce their goods. They couldn’t just be picked up and discarded as needed. Human resources required attention and care, and it made a difference to productivity and profit when they were thought about more carefully.
Today, we are moving on from that original insight, but in two contradictory directions, two directions that reflect what is happening in the workforce itself. On the one hand, as the term suggests, people with traditional jobs continue to have instrumental value. Not intrinsically important, they are still resources needed in production. On the other hand, in the knowledge industries that depend on engagement and creativity, workers need to feel valued and to have the experience of being effective. Without that they won’t produce the insights and new ideas that are needed.
Traditional H.R. is inadequate to deal with the needs of this second stream of “knowledge workers” with their symbolic capacities and sophisticated needs. On the other hand, businesses seem to feel that the majority of old fashioned workers are simply not worth the effort they had poured into H.R.
They can’t get rid of their needs, but they don’t want to do more than the minimum. For that group outsourcing H.R. is the solution—and making the resources hard to find.