Oct 4, 2007

HR as a profit centre

An ex-colleague, Kaushik Srinivasan who has recently started to blog, posts an article he wrote on HR becoming a HR Organization and selling services to clients. The question this raises is, would internal HR services suffer if external services earn profits for the firm?

A number of benchmarking requests prompted Xerox to turn HR into a business. Xerox HR Solutions has turned the HR practices and expertise that it has developed over the past 25 years — much of which has earned quality and diversity awards — into a business. Its HR services now include consulting in such areas as employee empowerment, employee satisfaction, performance management, labor management, motivation, reward and recognition, work-force diversity and sexual harassment. And capitalizing on Xerox's core competency, document processing, it also sells document-management services and can recommend technical solutions to support HRMS technologies.

There are similar experiences by IBM, Levi Strauss and Walt Disney Co.,
HRO as a profit center is not entirely a new concept, but what definitely is new is the impact it will have on the HR’s reputations, both internally and externally.