2. Lowering the Cost of HR Operations
As I said a couple of says ago, I don’t care about getting HR a “seat at the table.” We should already be there. What I care about is getting HR to stay at the table.
Let’s face it. I don’t want HR Operations to cost very much. What I want to spend money on is not the call center, data entry, or payroll systems. To the point that I can minimize these expenditures, the better because they don’t add immense value to the HR strategy (the call center being an exception at times). What I do want is to spend lots and lots of money on my talent management programs and on communications. I’d also like to spend lots of money engaging my upper and mid level managers in conversations about business operations.
I’m pretty serious about this one. We talk about effectiveness versus efficiency. HR strategy is very much about effectiveness. HR Operations is very much about efficiency.
Part of the rationale for outsourcing is always “we (vendors) will take on the administrative tasks so you (client) can focus on the strategic stuff.” This is all very nice, but the reality is that we also don’t want to be spending money on HR operations when we could be spending it on HR strategy. And just as in the outsourcing world, our goal as HR people should be to shift the balance of tasks from the administrative to the strategic – regardless if we’re outsourcing or not.
One of the things I haven’t talked about much at systematicHR.com are centers of excellence (COE) – mostly because it’s just not what I do. However, organizations are implementing centralized centers to both leverage better cost models and centralize talent in a way that is most effective for delivery. Think about what the obvious outsourcers have been doing: ADP and Ceridian (in their large employer service models) have both gone to fewer service centers. For one thing, the cost model spreads fixed costs of office space and overhead personnel much better. Secondly having people in places where the right competencies are in higher supply and where you can get a critical mass of people to leverage a broader base of skills is very advantageous.
I actually believe that part of the outsourcing equation is employee and manager self service – basically broadening the outsourcing concept to your employees rather than just 3rd party organizations. As such, efficiency also means that you might deploy technologies to get more accuracy and less centralized administrivia.
While all of this cost cutting is very nice, the key is to not forget the main point – all if the cost cutting is to save money (and time) for you to spend on strategy work.