A few weeks ago, I had a discussion with a client around the value he saw from outsourcing different areas of their business. This meant outsourcing functions (or parts of it) from IT, to Marketing, People and Culture and other areas to specialist consultants who can manage it.
This business has a mandate to grow while still trying to manage their cost base, so this model works for them for the here and now. We spoke in depth about why he saw benefit in running certain areas of his business this way, including why outsourcing People and Culture was a great solution for them. One of the main reasons is that the business had grown organically, and line managers took on the responsibility for P&C related matters; it was always seen as a ‘nice to have’, not a ‘business critical’. The true value of what a well-developed people and culture strategy was never really identified and when trying to grow and manage cost, it can be seen as an unnecessary overhead.
However, as the war for talent and the importance of having the right people in place to help support their growth plans and retention (especially in a sales focused business), the value of a broad people and culture strategy was beginning to be seen as a missing link for this business.
So what are the benefits of outsourcing P&C:
It can be more cost effective and reduce overheads
The cost of internal people and culture functions can be high. Outsourcing offers more flexibility and scalable solutions and essentially ‘pay as you go’. You can access specific HR knowledge as and when you need it at a fraction of the cost of maintaining that expertise in-house.
It can save you time
Outsourcing this function helps you save time to focus on what’s important. Often organisations without a people and culture function have a COO/CFO or another senior team member taking responsibility for that area. By outsourcing this function, it frees up their time to work on business-critical issues and other things that matter like strategy and growth. If you do have an internal resource, you can outsource certain sections of people and culture which allows the internal resource to focus on the big-ticket items.
It can help you manage compliance risks
Employment law is constantly changing and staying across the rules and regulations can be tough. Outsourcing can give you access to consultants who are on top of this and can potentially give you access to employment law firms if they have one. We all know what a stressful and costly exercise it can be if things aren’t adhered to.
It gives you access to external independent advice
Third party advice is highly beneficial to any business and outsourcing people and culture means there is no bias when it comes to employment decisions.
If you are considering this model it is good to take time to consider what will best suit your business, so reach out to our team at Optimum Consulting for a chat. The many benefits of outsourcing People and Culture may assist in creating a better overall environment for your organisation.
MIKAHLA SMITH
Executive Consultant – Group Solutions
Mikahla began her career working for a small business consulting firm before joining Optimum Consulting in 2010 as a Consultant. She has since gained over 10 years’ experience in the industry and over this time has held a number of leadership roles (both onshore and offshore) and is currently an Executive Consultant – Group Solutions.