Benchmarking as a Function of HR Outsourcing

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Author: Future Manager Research Center

The principle, on which HR outsourcing is founded, can be summed up with the sentence: let others do what they do better than you, reaping the benefits that will guarantee to the outsourcee company the implementation of its core business.

The outsourcee is the company that outsources the operational management of one or several previously internal company functions relies on an outsourcer that is another company specialized in this type of service.

The strategy underlying the decision to use outsourcing or not requires an analysis of various factors such as: considering the exposure to risk that this solution could entail, analyzing how much this/these activity/ies to be “entrusted” can generate potential benefit; or consider the consequent evolution of the company as a whole when you decide to use this service. In addition, in order to define which activities to outsource specifically, it would be appropriate to assign to each of them the weight that the buyers attribute to each process in terms of value added.

To get a precise picture of your core business, a tool that can be of fundamental support is comparison, in particular comparing your performance with those of direct competitors. In order to make this parallel, benchmarking is often employed; a term used for the first time in the field of IT, then extended to various other sectors.

The concept of benchmarking is applied whenever it comes to comparing the performance of a drive, process or tool with different market leaders. It also begins to be widely used in the field of human resources and, as well as in the world of economics, it consists of a methodology based on systematic comparison that allows companies that apply it to compare themselves with the most competitive ones in the sector and, above all, to learn from these to improve in turn.

In this way, value is given to the performance and results of business processes compared to competitors and a portfolio of skills will be obtained, allowing to identify those that create value for the company, which will concentrate more resources on these, increasing the advantage over their direct “opponents”.

Be careful because taking advantage of benchmarking does not mean emulating your competitors (also because it is well known how counterproductive an attitude of this type could be); it is an objective assessment aimed at conscientiously identifying which activity should be outsourced and what its market value could be.