Nov 9, 2007

Outsourcing HR

Traditionally outsourcing HR means large organizations outsourcing the repetitive mundane work of HR like benefits and payroll processing.

Recently however, I came across two organizations, both based in Hyderabad who actually do a much "high-end" HR outsourcing work. Both of them focus on startup businesses and the Small and Medium Business (SMB) segment.

Traditionally the SMB segment have always struggled to hire superstar talent as well as afford high end consulting services. That's because they lack a great Employment Value Proposition and usually can't afford high consulting fees.

What these two firms are doing is approaching the SMB clients, organizations that have 50-100 employees and are saying, "Let us take care of all your HR needs" . So they place a junior consultant at the client's site to become the de facto HR executive for the organization. The senior consultant commits to also spending a periodic time with the top management of the client and becomes the de facto HR head for the firm.

The client actually gets the expertise of two talented people for a much cheaper annual contract than they would have to pay for two full time resources.

A friend of mine in Pune was also experimenting with this kind of HR services for clients.

Will this be the next model of HR consulting growth?

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