Business

How outsourcing adds value in HR

IMG_6097_Roddie-&-Niall-Doherty NorthgateArinso (NGA), the former Cara Payroll Group in Ireland, is a leading global HR software and services provider, offering innovative solutions to employers of all sizes. Roddie Aherne, Business Director of NGA in Ireland, looks at the role that outsourcing can play in HR today.

With 45 years’ operating in Ireland and with over 100 staff working here, NGA helps HR executives to optimise their service delivery through smarter processes and more efficient technology, supporting workforce administration, payroll, benefits, recruitment, learning, and talent management. Worldwide, it has 8,500 staff with offices on five continents, supporting customers in more than 100 countries.

Business leaders today expect a number of things from HR, prime amongst them being:

Workforce and talent strategy: how to get the best people into the right place at the right time;

Workforce performance: how to get the best results from people;

Workforce basics: how to ensure HR (i.e. administration, payroll, benefits, health and safety etc.) is compliant with regulations, labour agreements and company policies.

The demographics, attitudes and expectations of the workforce of the future are evolving almost as fast as today’s technology. To address these challenges, HR professionals must exhibit three critical competencies:

Create an agile organisation;

Improve delivery quality; and

Drive down cost.

An HR function that can clearly state what tasks and activities are important, eliminating those that are not, will help the organisation in striving to be more successful. HR must re-evaluate priorities while delivering support. The HR function of the future will be designed around delivering services that matter, using the following requirements:

Value creation: identifying workforce opportunities to support the business in sustaining growth and profitability while delivering tangible performance results;

Flawless execution: continuously driving service innovation and delivery excellence while scrupulously managing cost and risk;

A simplified operating model: adhering to simplicity in all aspects of HR, including standardised processes and systems, eradicating the middlemen, consolidating capabilities and exploiting economies of scale.

NGA believes that the future HR organisations will consist of two departments: an HR service centre and a more specialist HR consultancy team that is flexible in size.

Outsourcing’s contribution

Irish companies are increasingly partnering with HR outsourcing service providers as a means of reducing costs and managing their internal processes more efficiently. Outsourcing has, for some time, been recognised as offering significant potential to achieve sizeable cost savings and efficiency gains in both the private and public sectors.

The creation of an outsourced HR service centre transfers the handling of all administrative and transactional activities with the SLA-based task of streamlining and improving operational services. An HR service centre uses the most modern technologies available to bring services to customers and constantly strives to automate as much as possible in order to minmise or eradicate the need for human intervention, while always seeking to take on board more tactical services such as self-service.

While reducing costs remains the principal incentive for companies and organisations seeking to outsource HR-related activities, there are a wide range of additional benefits which can be achieved as a result of outsourcing non-core functions.

For example, it removes risk by transferring to the provider the responsibility for adopting best practices and adhering to ever-changing legislation and it gains access to a wide range of experts while taking advantage of the latest technologies and efficiency enablers.

In order to achieve their goals, CEOs today are focusing on solutions that allow for flexibility and are thus evaluating the likes of shared services, outsourcing and joint ventures. The low hanging fruits have been picked. It is now time for more serious measures that increase the agility of an organisation in ways that spread both risk and investment cost.

Simplicity

NGA is witnessing demand for greater simplicity across organisations, often based on the provision of service centres, particularly focused on Payroll, HR administration and other HR functions. CFOs want to change fixed assets to variable, as a way to guarantee long-term sustainability.

Variability allows costs to be quickly shifted up or down, depending on pertaining conditions. Thus SAAS/cloud models, where organisations pay for what they use when they use it, are becoming more attractive.

Cloud-based HR solutions are being adopted rapidly by businesses. Organisations should examine how such solutions can impact their business and be aware that many vendors are providing their latest capabilities and innovations in the cloud and not through traditional on-premise solutions.

At NGA, we talk about Business Processes as a Service (BPaaS). This reflects our view that businesses now look for providers that can offer a blended and integrated mix of services and technology, not just one or the other.

Organisations will continue to require functional expertise and add-on services, ‘wrapped around’ their cloud-based technology platforms. Running technology in the cloud doesn’t mean that the complexity behind HR processes goes away. Nor should HR professionals be too prescriptive about their embrace of the cloud. They should take time to find the solution and delivery model that works best for their business and realise that the cloud is not an ‘all or nothing’ choice.

It is the sensible combination of existing, well-performing resources and future possibilities which will define winning HR delivery strategies. It’s important to recognise that this marks the beginning of a business evolution, not the end.

Northgate-office The new HR

The benefits to be achieved through establishing an HR service centre can be greatly enhanced by the introduction of self-service for both managers and employees. The scope of e-HR is vast, offering reduced costs, increased productivity of both staff and their managers, easier access to and control of information for employees and the opportunity to provide ‘value-added HR’.

This access is more and more based on mobile technologies with staff logging in on the move using smart mobile devices. It can provide huge advantages such as reducing the amount of repetitive and routine administration tasks performed by HR, thus allowing HR to focus on the organisation’s strategic goals and key issues while improving data management and reporting.

The changes discussed here don’t and won’t happen overnight. They take vision, leadership, dedication and resilience. HR organisations need to take a step back and have a good, honest look at the current state of HR and identify what works and what doesn’t. It requires a special focus on standardisation and simplification while making sure that HR focuses on business priorities, demonstrating sound business sense and delivering tangible results.

NGA expects an evolution, not a revolution. But just because it’s an evolution does not mean the changes should be small. These changes are fundamental in delivering HR results that matter and that enable an organisation to deal with its future.

NGA_CMYK Roddie Aherne – Business Director
Email: roddie.aherne@ngahr.com or
irelandsales@ngahr.com
Website: www.ngahr.ie

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