What ever happened to core business competencies?! Bret Starr of StarrTincup will be releasing a survey of HR professionals focused on their view of the HR-vendor relationship and value proposition. I was shocked to learn that only 6% of all HR professionals surveyed stated that it was better to develop solutions internally than go to a vendor for help. All I could think to myself was that our businesses have become full of managers at the expense of do’ers.

I worry that entry level staff (in HR as well as other areas of the business) are now coming in to a workplace with such entitlement, that they feel their job is to MANAGE their job. This may not seem like such a bad thing at first glance, but the result of this perspective is that fewer and fewer people are actually DOING their jobs. It seems as though more and more people consider themselves above the work associated with their job, and are turning to outsourced solutions in growing numbers.

How bad has it gotten? In this article from Workforce Management, a respected resource, author Margaret Steen is selling us on the value of outsourcing for an outsourcing company!

If Done Right, Outsourcing Can Help Staffing Firms Become More Efficient | workforce.com.

So, I’m not completely obtuse- I do understand that some competencies are difficult to find and hire for. But these are staffing agencies! Surely they could source competent candidates with the skills, ability, and motivation to be great employees, right? And for those who argue that it makes sense to outsource IT functions, as this isn’t a core business competency, I say WAKE UP! If you really think that technology and IT infrastructure are NOT core competencies in today’s business world, you’re not paying attention (see how this approach has worked for newspapers).

The following quote from the above article attempts to summarize their report, but falls short on one major point:

The bottom line on outsourcing is that it can save money if done well and with the right functions. But it’s not a panacea. The key question, Wintrip says, is: “At the end of the day, will this help the firm make money?”

I suggest replacing the key question with: “Will this help the firm increase profitability while not sacrificing long term growth and innovation?” In truth, a company with qualified employees who understand how to do the work associated with their business are far more capable of generating new ideas and translating them into profits. Don’t expect that type of engagement or understanding from your outsourced solution.

Lastly, with regard to the decline of do’ers in the office, beware the long term affects of creating this type of culture. The best manages are those who have had access to mentoring and training for management skills, but have also worked at the foundational level in their organization. These people have the very best understanding of the workings of their organization, both the strengths and weaknesses. They understand the impact of macro decisions at the micro level in a way that someone who has not done the work can.

If finding outsourced solutions has become a valued and core competency at your organization, it may be time to re-examine your long term business goals and strategy. Outsourced companies will come and go, as will your employees. Those who know intimately how the small details affect the bottom line are invaluable and will someday leave your company. Will your new hires be learning from them, or just learning how to find a company to outsource the work to? If it’s the latter, how will they know how to evaluate those vendors?


Views: 146

Comment by Paul Alfred on November 19, 2010 at 3:47pm
Its Scary Jason,,but Wipro, Sapient, Tata, (Accenture in some respects) ... and a whole host of Outsource players have come and unfortunately are still here ...
Comment by Harvey Daniels on November 19, 2010 at 5:30pm
Excellent analysis, perspective, and article. Thank you.
Comment by Charles Van Heerden on November 19, 2010 at 9:19pm
Hi Jason, great post and thoughtful observations. I am not sure it is only perhaps lack of competencies that drive outsourcing, but certainlyit seems in Australia to be also due to very low staffing in HR.
Example, one of HR Managers I am coaching has to to do all HR for more than 400 staff with only one other HR Coordinator - big ask.
Usually companies will get what they are prepared to pay or invest. Building capability within the organization requires executive commitment and recognizing real value.
Comment by Jason C. Blais on November 20, 2010 at 9:42am
Thanks for the comments everyone. I agree that declining staffing has been the primary contributing factor to the increase in outsourcing, for sure. Unfortunately, I fear that as companies have consolidated to survive the economic downturn, this smaller workforce will become normalized. I'm curious to see if companies reinvest in internal competencies and talent when the economy swings back.

Charles, just to clarify a bit, I don't believe that lack of competencies are driving outsourcing, but rather that outsourcing is driving lack of competencies... not sure how pertinent that distinction is, but thought I would mention it.


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