HR Outsourcing Should Fit Your Organization Like a Glove, Not a Pair of Handcuffs

March 25th, 2015
Written by: Elizabeth Richards

Last week’s blog post focused on “When and Why Should I Outsource HR?” Here are 11 Definitive Signals.” Let’s say you have now identified that your organization is experiencing one or more of those signals, and you’re considering outsourcing your HR function—until you can justify a full-time hire. One of the first and most important considerations is whether you need HR Outsourcing that is client-centric or process-centric. Here’s the difference:

• Client-Centric HR Outsourcing – The actual services provided in Client-Centric HR Outsourcing are, as the name suggests, defined and customized based on the specific needs of your organization. A Client-Centric approach starts with your business objectives and requirements and how the HR function should support those. The job of your HR resource or consultant is to understand and prioritize your requirements and then apply best practices in critical areas such as benefits, recruiting, compensation and compliance, to achieve the desired business outcomes.
• Process-Centric HR Outsourcing – Process-Centric HR Outsourcing often starts with a template or package of services that is driven primarily by two things: (a) What the HR firm or PEO (Professional Employer Organization) has determined, based on their experience, are the most commonly needed HR services; and/or (b) The array of services the HR firm or PEO already offers. For instance, an HR firm or PEO that offers a line of recruiting services, separate from HR services, may often recommend that you include recruiting in the scope of your HR outsourcing.

There are distinct business situations that may call for one or the other of these approaches. Based on TPO’s experience, the client-centric approach works best for organizations with fewer than 100 employees that are exploring for the first time the need for an HR function. These are situations where “you don’t know what you don’t know;” and choosing a client-centric approach allows you to customize the HR priorities to fit (like a glove) your business objectives as they evolve. And on the flip side, you shouldn’t be “handcuffed” to a specific range of services that you may not need.