What are the disadvantages of outsourcing HR services?

There's a separation between HR and the company that is very hard to overcome. An In-House HR Department, if run properly, will know your company, it's objectives, it's culture, it's management style, the actual employees, and the Click Here actual supervisors, managers, and officers -- along with their personal preferences in hiring, what kind of person is going to fit with that supervisor or manager, or officer and the other people working in that department.

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The above makes it almost impossible for the outsourced HR service provider to run a good Employee Relations (or Industrial Relations Department, as it is called in manufacturing, unionized companies.) They are not there to advise and guide management in avoiding potential lawsuits and Visit Here EEOC or Worker's Compensation, or Health and Safety laws.

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They can certainly advise, but they do it in a vacuum without having that day-to-day familiarity and understanding that happens in a well run HR department. Their solutions to employee problems tends to be "packaged," and comes from a "one size fits all" mentality. No matter what they say, your company is just one more client and it is a rare thing for them to do anything but follow a one size fits all approach.

It may seem cheaper but it will cost you more in the end. The HR people assigned to your company don't work for you. They don't have company loyalty, except to their company, the one that pays them directly.

Outsourcing is a real buzzword these days and companies are doing more of it all the time, especially call centers that they can locate in India or China or Mexico. But my experience is that U. S. based outsourcing is bad and outsourcing to foreign companies is terrible. It's like buying a cheap car. You get what you pay for. My wife's company, for instance, outsources a great deal of their work to a company in India. Ninety percent of it has to be cleaned up by u

Employees before it can be sent on. It's just poorly done work. In more than 40 years consulting with and working inside companies as an HR manager or officer, I saw the effects of outsourcing first hand, and it never works well for an ongoing function in the company. When I worked for Blue Cross Blue Shield, they had such a mess with their outsourced computer systems that they finally started paying claims without even reviewing them because they were so far behind. They went into receivership and the courts appointed a new CEO and they lost a lot of money till that contract expired. Then they had to build a new IT department from the ground up. They lost millions.

Of course you will notice that I worked as a management consultant for a consulting company. so, I was an outsourced function. But we were selling a service that most companies do not normally keep on staff. In that case, I also worked inside companies with responsibility for the same things I did as an outside consultant. It never worked as well to be inside because I was never truly independent.

I reported to a management chain that often interfered with my ability to act as a total, objective outsider with the ability to tell them what they needed to hear without having it watered down and controlled by someone's bureaucratic impediments. Outsourcing or buying a service never works well unless it is hiring specialized top notch professionals in very specialized functions that are not ongoing. Otherwise, it's best to run it inside and try to keep the bureaucracy out of the way.

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