Human Resource Outsourcing

The Agile HR Department: Can Outsourcing Improve Flexibility

Business dynamics require companies to innovate and respond to market demands quickly. Agility has become a key requirement for most business functions. Human resources (HR) is also undergoing a transformation and adapting to the changing business environment. The days of strict adherence to rules and long-term planning are being replaced by a lighter and swifter HR model, otherwise known as agile HR. For some companies, this has been in the works for a long time, along with the transformation of other business processes, and for some it has been a deliberate action to align along with other business objectives. The bottom line is that agile HR is having its moment, and is here to stay.

In the tech world, Agile has been a popular software development methodology. However, many business functions have adopted the agile approach because of  several factors - prototyping, flexibility and adaptability to changes, and developing projects on sprints, which are iterative, time-boxed activities completed by project teams. Given the many touchpoints of HR in an organisation and the deep impact that it has, the agile transformation of HR is more complex than most business functions.

The agile transformation of HR

There are several areas of HR where agile transformation is already taking place. Here are a few of them.

Employee reviews and raises: Appraisals for employees were typically conducted once a year. However, given the shorter time frames for projects, performance feedback given at the end of a project makes more sense than waiting for an annual review. This offers managers the opportunity to give relevant feedback, and for employees to act upon it immediately in the next project. Compensation is another key area where some companies are offering instant rewards based on performance, rather than  waiting for a year-end bonus.

Talent development: Companies are also investing in coaching managers and supervisors in short bursts, allowing them to implement newly-learnt skills and provide better feedback to their reportees. Talent management is more team-focused just like the agile scrum, where teams evaluate their progress, assess managers and peers, and determine how to improve performance by addressing gaps. Learning and development activities are going agile too. For instance, continuous learning opportunities are provided and employers are proactively advising employees on the skills they need to acquire, based on their interests and demands of the current or a future role.

Hiring and recruitment: Agile recruitment breaks down a complex hiring process into simpler, manageable activities. Typically, hiring sprints are used to achieve an objective within a specific time-period. For example, the first sprint may be used to obtain all the approvals, the second would be to advertise the position and the third sprint may involve screening and interviewing. 

In an uncertain economic climate and fast-changing business environment, agile HR offers several benefits to companies. By offering flexibility, quicker reviews and continuous learning opportunities, employers can keep employees motivated and align to customer expectations quickly. However, achieving agility in HR is challenging, as there are several iterative adjustments needed. Companies need to invest in training and development both for methodology and mindset. Employees need to be trained too, as processes and policies might change. This change needs to be gradual and iterative, and can be made smoother by outsourcing some of the processes to an experienced partner.

Achieving HR agility with outsourcing
By outsourcing some of the tasks, internal teams can focus on innovation and strategy, leaving the routine administrative activities with the partner. Outsourcing functions such as payroll that are time-consuming and have high administrative overheads, frees up valuable resources and is also cost effective, as the HR partner would ensure accurate payouts to employees. Similarly, benefits administration too can be outsourced. By outsourcing talent acquisition activities, companies  can focus on hiring and recruitment strategies. With hiring and recruitment going phygital, partners would also have the latest technology to support varied requirements from clients, besides saving valuable time and cost of companies. HR partners also have an updated knowledge of compliance and legal requirements, enabling companies to benefit from this. Overall, outsourcing allows for adaptability, flexibility and scalability in HR, a key requirement to go agile.

HR initiatives need to be aligned with business requirements and goals. An agile HR outsourcing strategy will ensure that agility is optimal and adaptive. Companies must define the goals and objectives of  outsourcing, and check how agility can be incorporated into every function. Identifying the key areas that can be outsourced, as well as determining the skills required internally in the team will ensure that the approach is both innovative and efficient. Like all things agile, this strategy too needs to be iterative and needs continuous improvement based on company requirements and market conditions. The right outsourcing partner can support the company with expertise, knowledge and the required technology infrastructure to build agility in HR, which has now become a necessity for long-term growth and sustained success. 

How can Infosys BPM help?

Infosys BPM’s Human Resource Outsourcing (HRO) services focus on integrated consulting, technology, and outsourcing solutions that are flexible and adaptable to your business and the industry. Our agile HR solutions combine domain expertise and cutting-edge technology to help our clients build lean and competitive organisations of the future. 

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