FEATURE
Outsourcing of HR functions is a reality for many companies, large and small, today. The benefits affect owners, C-suite executives, HR managers and employees, and can include cost savings, and access to highly skilled professionals and advanced technology, which can collectively result in a sustainable competitive advantage. The broad adoption of HR outsourcing across Asia-Pacific has also emerged as a key finding of regional research conducted by Talent2, a leading HR and business process outsourcing provider. The Talent2 Asia-Pacific Market Pulse Study found that across Australia, Hong Kong, China and Singapore, the majority of HR executives (80-90%) are now considering HR outsourcing as a solution to key challenges cited, including search and recruitment (64%) and employee retention (50%). Commenting on these findings, John Rawlinson, CEO of the Talent2 Group, said: “This research reinforces that ongoing skills shortages are hampering organisations across Asia from finding the people they need to drive top line business growth. What’s interesting here is that HR executives are focusing on different ways to address these challenges – namely through outsourcing, and investment in learning and development. “The fact that the overwhelming majority of HR executives are outsourcing HR functions (or are considering doing so) represents a massive shift in the industry – even compared to five years ago. Nelson Hall’s June HR Outsourcing Index backs this up with the industry reporting a 10% increase in confidence in the HRO sector over the last quarter. It clearly shows that outsourcing is now being considered as a strategic solution, rather than a cost-cutting tactic in response to the global financial crisis,” Rawlinson continued.
Across the region, all markets are seeing strong utilisation of outsourcing as a solution to many HR challenges, with 95% in China, Australia and Singapore seeing clear benefits of outsourcing. In Hong Kong, 91% are seeing clear benefits of outsourcing, while regionally 16% of HR managers are turning to outsourcing as a means of addressing skill shortage problems. Indeed, interest in HR outsourcing has increased significantly in Asia in recent years. “Recently, our outsourcing department has been getting more enquiries on outsourcing services from many companies,” says Charles Liaw, Director, Times Software. “It could be that companies find it tough to recruit new staff and retain existing staff.”
What to outsource? According to the Talent2 Asia-Pacific Market Pulse Study, 71% of HR executives across Asia outsource all or part of their search and recruitment function. This (40%) is the function most likely to be
Cloud and business process outsourcing
support business goals by reducing infrastructure costs while freeing up HR resources for strategic innovation Source: Top 10 HR Technology Trends for 2014 – Annual US Society for Human Resource Management Conference (SHRM)
Which “shore” works best? Depending on the proximity to your business location, you can outsource work to an offshore, near-shore or onshore locale. • Offshore refers to a foreign location that is far away in distance and, more importantly, far apart in time from your primary place of business. • Near-shore also refers to a foreign locale, but one that is much closer to you. • Onshore is a locale in the same country as yours. • Of the two considerations, distance and time, the latter is the most critical. All other factors being equal, it is much more effective to work with a near-shore partner that is in the same time zone as yours than it is to do it with an offshore vendor that is three or four time zones away. Source: Nearsoft
ISSUE 13.9
SUPPLEMENT 13