Human resource outsourcing helps businesses keep house by taking care of administrative tasks. Transformational human resource outsourcing takes HRO a step further. In partnership with the client, the HR service provider delivers the critical resources to support real change in the organization. Transformational HRO is more than a set of services--its a comprehensive solution for getting the most from a business.

This "enlightened" approach to outsourcing takes a long view of investment in human capital, putting productivity gains before simple cost savings. Outsourcing consultant Atul Vashistha observes, "Many CEOs are saying, Dont tell me how much I can save. Show me how we can grow by 40 percent without increasing our capacity in the U.S." The point isnt to ship out jobs, but find ways to use existing personnel more effectively.

Outsourcing Strategic Human Resources

Transformational human resource outsourcing extends beyond routine administrative tasks to broader services. Some of these strategic services include:

• Global Recruitment
• Performance Management
• Corporate Training
• Human Resources Information Technology

Human Resource Outsourcing at Work

Some of the transformations human resource outsourcing catalyzizes include:

Corporate Growth. Downsizing is no longer the name of the game in transformational HRO. Instead, companies have their sights set on the broader goal of growing profits through innovation and increased productivity. Outsourcing human resources frees a companys analysts, engineers, sales representatives, product managers, and HR managers to focus on high-value pursuits: developing the business, innovating, connecting with customers, etc.

Customer Relationship Management. Wachovia began outsourcing its human resources because "its what we need to do to become a great customer-relationship company." Handing off HR administration helps companies focus on their core businesses. In Wachovias case, the resources it saves through outsourcing help open new branches and build the customer support team.

IT Overhaul. An outdated IT infrastructure can hobble a company and lock staff into inefficient work flows. Transformational HRO assesses the existing workflow and helps the business optimize its IT infrastructure for greater efficiency.

Time to Market. Transformational human resource outsourcing can help businesses speed up production through greater efficiency. Onstor, which develops storage systems, has cut the time it takes to fulfill a customized order in half since it engaged an engineering human resource provider which provides global recruitment services.

Flexibility. Companies competing in a global economy need to respond swiftly to opportunities as they arise. Outsourcing human resources allows companies to achieve this sort of flexibility, both through the global reach of the extended workforce and through its scalability. Contracted HR services allow companies to recruit and train workers quickly as they are needed, anywhere in the world.

A Transformational Outsourcing Relationship

Transformational human resource outsourcing turns the service relationship into a long-term collaborative partnership. As business process outsourcing journal Sourcing defines it, transformational outsourcing "is a collaborative, risk- and gain-sharing relationship among the organization and its service providers to drive enterprise transformation." Human resource outsourcing is more than a business process tool--its a comprehensive solution that helps businesses realize the full potential of their workforce.

Sources

IBM (PDF)

Business Week