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.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.
There are similar experiences by IBM, Levi Strauss and Walt Disney Co.,
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?
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Hi Gautam,
ReplyDeleteI feel that the capabilities required to be a successful HR consulting firm might be quite different from that required to be an effective internal HR department, especially when it comes to 'business development' related capabilities. Also, even if the HR function in a company has been able to implement particular HR processes/ systems/ tools very successfully within their organization, it might be quite tricky to decipher to what extent the 'success' can be replicated in other contexts/what modifications needs to be made in order to make the process/ system/ tool work in other contexts. While this is a standard problem in 'best practice benchmarking', it might be even more problematic if the internal HR team does not have people who have seen/worked in multiple client contexts. This also brings in the issue of the profile of the current set of people in the HR function in the company and to the degree to which they are suitable for HR consulting work. If the degree of profile match is not high, then the perceived synergies between internal HR and HR consulting operations/teams might not be realized. Of course, it is quite another matter if a firm makes a strategic decision to invest in setting up an HR consulting/outsourcing unit to generate/protect downstream business (an example could be the case of a firm whose main line of business is developing HR/ HRIS related software packages/ tools).
Regards
Prasad