The Future of HR: Outsourcing?

The afternoon session of the LINK 2013 conference at the Fairmont Hotel in Washington was all about prognostication, with HR leaders from a cross-section of industries — including retail, healthcare and financial services — discussing their views on how to, as moderator and CEB Executive Director Jean Martin put it, move HR “from [being simply] inputs to drivers of strategy” within an organization.

The most startling — and obviously ominous — prediction came from Kevin Donavan, VP of finance, HR and administration at Japan-based Otsuka Pharmaceuticals, who said bluntly that “it may not be popular, but outsourcing is the future of HR.”

Donavan said outside consultants can bring a much-needed business perspective to HR problems, and “I need HR to bring business solutions to my business.”

“There’s simply no way I can build a scalable model to deal with all our data,” he said in defense of his use of outside consultants. “That’s why IBM bought Kenexa.”

But Rich Hughes, SVP of human capital at UnitedHealth Group, pushed back on that idea, saying that outsourcing isn’t always the right decision for every situation. He then recalled his organization’s decision a few years back to go that route to meet some talent needs.

“It was a mistake to outsource our talent acquisition,” he said, adding that the company eventually brought the function back in-house.

Meanwhile, Anthony Ponsiglione, SVP of HR Operations for Genworth Financial, said the core principles of HR are “timeless”  and therefore will not change much in the future.

“People will always be part of the equation,” he said. But he added that expense management is currently the most important driver of change in HR these days, and the function needs to become better business people if they hope to thrive and advance in an organization.

“HR needs to have a business perspective,” he said.

Hughes said that while big data and data analytics may be helping to push  HR onto the cusp of becoming a real “decision science,” there is still much more to be done.

“We’re not there yet,” Hughes said, “but we’re headed in the right direction.”

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