HUMAN RESOURCES belongs to the group of activities that managers usually outsource to external agencies.
Lower costs, access to greater expertise, and the possibility of concentrating more on core business are often mentioned as advantages of outsourcing human resources (HR) work.
"Managers do not have to concentrate on areas that are not a priority for them. The concentration of managers' potential in important things brings results," said Lenka Bartová, marketing manager at the HR and counselling company Management Partners Group.
"What is more, outsourcing prevents the high fluctuation of employees that carry out only non-core operational activities and are not connected so tightly to a company," she added.
According to a survey conducted by the consulting and outsourcing firm Accenture, the reasons managers outsource their HR activities are also to free up their HR departments so they can focus on broader company issues, to gain access to more information, and to receive quicker responses.
Although outsourcing is so far not a well known word in Slovakia, companies already use personnel agencies quite often for some basic services in HR, like recruitment, educational agencies for training, or accounting firms for payroll and pension administration.
"We think that many Slovak companies often use the services of such firms," added Dalibor Jakuš, executive director of Slovakia's most visited internet job-search engine, Profesia.
HR services, as well as outsourcing HR, however, can be a lot more complex than this. Bartová said it is important to differentiate between personnel outsourcing and personnel leasing, which is "kind of a lower form of personnel outsourcing".
In terms of leasing, a personnel agency is responsible only for the choice of the right people for needed positions. In outsourcing, an agency processes the services outsourced by a company.
That is why there is a gradual development of specialized agencies that offer certain activities that companies can pay for, for example telemarketing, call centres, or computer network administration.
Personnel leasing already has a stable position in the Slovak market. Common users of the service are IT companies, big production corporations, or big supermarket chains hiring people for seasonal work.
"Generally it is the case that someone who can use personnel leasing can use outsourcing too. In its introduction to the Slovak market, however, we have to overcome initial scepticism.
"Nowadays, these services are particularly exploited by international corporations operating in Slovakia that have experience in using them in their mother countries," said Bartová.
Martin Krekáč, founding group chairman of the Amrop Jenewein Group, suggested that outsourcing processes connected to HR management is becoming more popular in European Union countries as well as in Slovakia. "They are achieving a standard position on the market of professional consulting services," he said.
The main reason for outsourcing some HR activities can be, according to Jakuš, a lack of time and personnel resources to carry out certain functions. It can also be an effort to raise the quality of needed activities.
Generally, there are two possibilities when a company decides to outsource HR. Outsourcing may be an integral part of a firm that was established with a strong orientation toward its core business. All other activities, it then buys from personnel or other agencies.
It can also be a company that was trying to maintain all its activities on its own at the beginning, but gradually found that not to be an effective solution. "The expectation of saved time and energy is often a reason that companies decide on outsourcing," summarised Bartová.
The risk in outsourcing HR, as well as any other activities, can be that an external person will stay too detached from the hiring company and will not always be able to stay up-to-date on its development.
"The risk, of course, exists, as in any activity on the market. It comes out of a bad choice of external agency," explained Bartová.
She continued: "We can say that a development in Slovakia copies the situation in the world. The same trends seen abroad are gradually adopted in Slovakia too, and with the accession of Slovakia to the European Union, this process will speed up. New investors will increase the demand on services in human resources too."
20. Oct 2003 at 0:00 | Marta Ďurianová