Janneth Mornan-Green, Contributor

With the changing paradigms of the 21st-century workplace, many companies are finding it difficult to give equal time to focus on their core business while managing their human resources (HR) functions.

To address this problem, outsourcing HR is becoming a viable option. This in turn enables businesses, especially those with limited HR capabilities, from the day-to-day personnel functions, including industrial relations and allows them to focus on their core competencies.

M. Audrey Hinchcliffe, chief executive officer of Manpower and Maintenance Services Limited, says, "While it is important to plan for human resources it may be far more prudent and practical to outsource HR."

According to Hinchcliffe, the complexities of the modern marketplace make the management of human resources "a critical issue for everyone". She says, however, that there are greater demands on management who might be increasingly finding that instead of focusing on meeting their production quotas, for example, more time is being spent on non-core activities.

This she argues "may not be the most efficient and effective use of time for business people, who may not be expert human resource managers anyway".

Human resource outsourcing, explains Hinchcliffe, involves the hiring of a specialist firm to manage all or some of the organisation's HR functions, including recruiting, payroll, human resource management and training. This, she indicates is becoming increasingly popular especially in a globalised environment where many companies are now expanding their operations into overseas territories.

"Foreign companies have the challenge of not only making their operations viable, but of adapting to new and different languages, cultures as well as industrial relations practices" she says.

Outsourcing HR functions

Hinchcliffe says that outsourcing the HR functions can help to smooth the transition and minimise the disruptions as these companies adapt to a new, and in many cases, totally different environment.

Other reasons for HR outsourcing include maintaining objectivity, which can sometimes be lost when the function is performed by a small in-house; or in small businesses where the expertise is lacking.

While HR outsourcing might not yet be a prevalent practice in the Caribbean, Hinchcliffe is of the view that with the changing business environment in the region human resource, outsourcing could grow in popularity in the future.

She says that the regional employers might find that the human resource management challenges are greater if the anticipated increase in the movement of labour under the CARICOM Single Market and Economy is realised.

"The mixture of different culture and labour-related exchange that will result might call for heightened human resource management skills," Hinchcliffe says, "This could motivate more HR professionals to establish their own outsourcing firms."

Hinchcliffe says that these services are not restricted to bigger companies, but are being utilised by small-size and medium-size companies too.

What makes HR outsourcing an attractive alternative? "Usually, the firm to which the service is outsourced is experienced in human resource management," Hinchcliffe says. She believes that HR outsourcing companies have an advantage of doing their jobs effectively. She says that HR is their core business and they have the required manpower to manage the needs of the clients.

HR outsourcing, some pointers

Hinchcliffe says there are some basic checks that companies wishing to go this route should do. She recommends the following:

Check whether the outsourcing company has the requisite experience.

It has a good track record.

Understands the organisation for which they are providing the service.

Knows the ins-and-outs of the job market, including compensation mechanisms.

Offers a range of services.

Have the required resources to meet the needs.

Are familiar with staff demands.

Have an intimate knowledge of strategies to protect workers' rights.

Are experts in negotiation and conflict management.

She says that firms that have excelled in the field are also aware that for human resource outsourcing to be beneficial, there has to be a strong partnership between the outsource organisation and the business owners that they serve.

jobsmart@gleanerjm.com