BGA Brainstorm: Think Before Outsourcing Human Resources

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Think Before Outsourcing Human Resources

By Alexian Wines

(Photo Credit: Wikimedia Commons).

I have recently been asked by colleagues, both internal and external, why BowerGroupAsia doesn’t outsource its human resources (HR) department. Arguments range from cost-cutting to the rationale “many of our clients are doing it.”

My response is that we won’t do this because our people are our most important resource. We will not outsource how we understand, support and care for them. Doing so would be tantamount to outsourcing our culture and letting others define us.

Most leaders understand the HR department is one of the most important departments for any company. Yet, it is often not prioritized and seemingly underappreciated. HR functions are often one of the first in line when budget cuts are needed. And then we, as leaders of companies, question why the great resignation continues to plague businesses, even as we return to some semblance of post-COVID normalcy.

The lack of recognition for the value of a strong HR department will result in two of the biggest overall losses any company could face: its people and its culture.

Companies have different goals and mission statements. But I believe that all companies can agree that the most valuable resource for most is their people.

We cannot expect to have return customers and satisfied clients if we don’t first have satisfied, well-supported (dare I say, happy) employees. As individuals, we all have a lot on our plates, and just like no two companies are alike, no two people are dealing with the same issues.

Indeed, employees are dealing with many different issues. These challenges range widely, and include single parenting, forced home schooling, domestic violence, substance abuse, mental health, taking care of elderly parents or special needs children as well as struggling to comprehend what can feel like local or global context that is out of control.

With so many factors affecting our people today, do we really want them to have to “put in an HR ticket” or dial a call center to understand what steps they need to take for mental health leave or to understand issues regarding their payroll or leave?  Not to mention the sometimes long wait for someone to respond. They may even not receive a response at all and be forced to put in another call or another email.

I believe most of us have been the recipients of poor customer service at some point in our lives and asked ourselves: how does this company stay in business when their responsiveness is so poor?

I purchased something recently and tried to call the company to see what their return policy was for an unused purchase. The first day, after going through an automated phone message, I sat on hold for over an hour. There was never an option to be called back and nobody ever picked up. On the next day, I tried again. Same thing. I was able to multitask while holding (again for over an hour).

Finally, out of frustration, I picked up my cell phone and went through the automated recording that asked, “if you would like to make a purchase, please dial 2.” I only waited for three minutes to make a new purchase but was still on hold for the other call (now well over an hour).

This scenario is much like what I see when I think about outsourcing HR. Companies can continue to outsource to save money, but the overall cost of unhappy employees will be higher because it will result in more pressure on talent acquisition and training, and it will undercut retention goals by degrading morale. When employees can’t get an answer to a question surrounding payroll or their benefits, the last thing they want to be told is, “put in an HR ticket,” and then hope they receive a timely response.

Employees need to feel valued. They must know the company they spend the majority of their waking hours working for is prepared to give them the same service that are expected to extend to clients, internal or external.

COVID-19 has had such a negative impact on mental health. It has made many people feel isolated and anxious, and some have come under new stresses related to new working conditions. In this environment, companies need to carefully evaluate whether they are willing to risk their most important resource being outsourced, and analyze the mid- to long-term impact on morale and the bottom line.

In my company, we have worked hard to maintain a strong HR team. I am proud that our senior leadership is fully aligned in recognizing the value that making sure our people are taken care of is a priority and must be managed as a core function of our business. Our mantra is, “we can’t be a company about people, if we aren’t focused on our own people first.”

My recommendation is to keep HR departments in-house and well-resourced. This is a critical juncture for prioritizing your people, listening to them carefully and signaling a willingness to adapt. All of this is fundamental to adjusting to the dynamic environment we are working in now.

By all means, invest in and the many technology tools that streamline and enhance capabilities. But treasure and cultivate the genuine people on your team that care about and respect your mission and their colleagues. You will reap long-term benefits far beyond near-term cost savings.

Alexian Wines is the Chief Operating Officer of BowerGroupAsia.