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Question
Question 13 (AC4.1)
Examine the ways in which the impact of people practices can be evaluated within your organisation, or
one that is familiar to you. What are the main barriers to evaluation? Illustrate your answer with examples.
Solution
The organisation, structuring, and evaluation of the people practices activities in various organisational settings differ based on the size of a company and the needs. In a 2017 CIPD report on HR business support pilots, it was revealed that SMEs and large corporations differ on how the people practices activities are executed. To the SMEs, the community experiences have enhanced the performance management process through investment in developing capabilities and inspiring the investment in young people. While large corporations, particularly the private ones, focus on their own strategies tailored toward their needs, SMEs can consider other approaches to develop and implement the people practice activities, such as outsourcing. The discussion below entails an evaluation of the advantages and disadvantages of outsourcing the HRM and L&D activities to consultants and sub-contractors.
Outsourcing, as defined by CIPD (2021a), refers to purchasing at least one business service externally. Examples of these services include recruitment and selection and learning and development. The specific approaches to outsourcing differ between companies and while some may choose to outsource virtually, others do it on the entire activity, such as managing the payroll and recruitment process. From the 2020 survey on the people profession by CIPD, it was revealed that the majority of the SMEs consider various outsourcing approaches for the professional element in the business activity or practice. For instance, a company can outsource the learning and development activity, which is tied to performance management. This involves the external company examining the employees’ skills, strengths, and weaknesses (Alneyadi and Almarri, 2020). These insights are used to develop the learning and development programs to equip the individuals with the relevant skills and competencies for the future. For example, a start-up company can outsource the learning and development activities from an external company, specifically on ICT and its application in sustainable competitive advantage.
Alternatives to outsourcing include shared services, offshoring, self-service systems, and consultancy, which entails the company being advised on the particular HR issues and processes (CIPD, 2021b). An example is the transformation of the strategic and total rewards to introduce flexible benefits. Unlike outsourcing, the consultants are not involved in the management or delivering the services after they are implemented. This is the role of the internal HR team. According to Giusino (2020) on the small-sized HR consultancy through literature evidence, it is apparent that companies benefit from the vast experience of the consultants and their ability to consider a wide range of issues as informed by the micro and macro environmental analysis of the issues.
Advantages of Outsourcing HRM and L&D Activities
The benefits of outsourcing include introducing a new perspective, reducing costs, enhancing efficiency, access to advanced systems, improved people management, accessing HR activities that are unavailable internally, and speedy response to the HR issues (CIPD, 2020a). At Almarai, for instance, the learning and development programs are outsourced from renowned companies in the specific field that the company is targeting. An example is outsourcing the training on ICT, specifically database management. The reduction in costs is centred on all the activities being conducted by the outsourced company, including assessing the workforce skills and developing the formal and informal learning approach. Efficiency is achieved by reducing the complexity in HR services (Damanpour et al., 2020). For instance, the recruitment and selection process can be tedious and involving for large organisations, such as Almarai. Outsourcing ensures that the company has access to a wide range of potential employees. Besides, outsourcing the recruitment and selection process is effective as the external company has mastered the requirements and the labour market, thus can offer the best advice and approach.
Another advantage is the enhanced speed of response to the issues. In the example of Almarai needing a specific individual to fill a certain position, outsourcing means that it can get the potential candidates quicker than when the recruitment and selection decide to affect the recruitment and selection process. This avoids delays. There are also HR activities that are unavailable internally. Lenz et al. (2020), through a description of the merging and acquisition expertise in Germany reveal that the companies engage consultants on various issues, including legal advice on the taxes. This is essential in ensuring that the company follows the right procedure. Outsourcing also provides company access to advanced systems. Outsourcing also reduces risks and delays in obtaining HR services.
Disadvantages of Outsourcing HRM and L&D Activities
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