Face-off on HR Outsourcing

No blood was spilled during the Great Service Delivery Debate, as Phil Fersht and Lowell Williams faced off during a Wed. afternoon session at the HR Technology® Conference. But the two experts didn’t pull their punches either when it came to discussing whether or not HR outsourcing has lived up to its promise.

The benefits of HRO haven’t materialized, suggested Phil Fersht, founder and CEO of consultancy Horses for Sources in Boston.

Consequently, he said, a number of deals have ended up going sour.

Fersht cited Convergys as an example. “Convergys had a great run with HR outsourcing, but in the end couldn’t [make a go of it] and ended up selling the business to Northgate Arinso,” Fersht said. “The whole [first] generation of HRO didn’t work and Wall Street didn’t like it. So people started talking about single process.”

Fersht suggested that the industry is basically back to where it was 10 years ago.

Williams, however, was a bit more upbeat about the model, showing a slide listing 23 HR processes that are being outsourced today.

“The fundamental premise that we could take administrative, repetitive steps out of HR and move them into a service center is a very valid one,” said Williams, executive director of global HR services for EquaTerra, a Houston-based advisory firm.

To be sure, Williams said, HR outsourcing hasn’t fully lived up to its promise. But the benefits of HR outsourcing are equally clear.

If there’s an area employers in need to get better at, Williams added, it’s figuring out “how to repurpose the people in the company once administrative tasks have been outsourced.”