The challenge Human Resource has to overcome

Analysts, industrialists and academicians are of the opinion that a strategic mix of shared services and outsourcing is the new model that is driving HR teams in global organisations to achieve and sustain excellence. However, what is yet to be understood is whether outsourcing is really the pathway towards
attaining competitive advantage. Today, transformation of HR operations has shifted the focus from a traditionally reactive and administrative function to one that is tightly connected to the business. The effect of this strategy is significant in making it possible for businesses to respond to market and human capital changes more rapidly.

When AT&T enters into a seven-year outsourcing contract with Aon Consulting for combining the talents of its human resources and payroll organisations with Aon’s core competencies in employee benefits, compensation, employment and other services – what is their prime motive? Most certainly, the obvious answer would reflect the basic principle kkore on its core competencies.” Initially, outsourcing was done mainly to bring down costs, however, a changing feature of outsourcing today is that it no longer involves only low-key operations. Increasingly, services that are being outsourced are those that require highly skilled and qualified personnel who are able to provide the service quality standards required and this has led to a increase in the outsourcing of human resource services.

Today, human resource professionals are expected to deliver more advanced and differentiated human capital skill sets, create and maintain high performing workgroups, offer technology platforms with increased functionality and direct access to information as well as partner with business leaders to align people strategies with business goals in order to achieve corporate initiatives. Dave Ulrich, a leading scholar in human resources, recently wrote that the competitive forces that managers face today and will continue to confront us in the future demand organisational excellence. The efforts to achieve such excellence – through a focus on learning, quality, teamwork and re-engineering – are driven by the way organisations get things done and how they treat their people. Those are fundamental human resource issues. To state it plainly: achieving organisational excellence must be the work of HR.

See full Summary.