Insourcing – it's the new (and old) black

HR/Talent Pros are always nervous about outsourcing.  I do some consulting from time to time in the corporate HR space and eventually in my time with corporate HR executives the conversation will find its way to outsourcing.  “Hey, Tim what do you think about us shopping our “blank” out to….?”  It's a basic skill vs. resource vs. culture decision – and comes down to your overall people strategy.  It's not a decision to take lightly and I've never met an HR executive that I thought ever did take it lightly, but I have met a ton of HR executives that bought the new car smell of outsourcing. Don't get me wrong – I think there is a time and place for everything – even outsourcing certain functions of your HR shop – but it's a very dependent decision with a ton of variables – definitely not a one-size-fits-all.

Many of you probably feel the same way – I'm guessing.

I want to share my typical response to HR outsourcing:


I get the typical responses back at me:

“It's cheaper” (well, maybe – volume question)

“We don't want to be in 'that' business” (Really?! You don't want to be in the business of helping your employees… HR Pros say this statement because it's fed to them by HR Vendors – “Hey, you guys don't want to be in the benefit business?! No, you want to be Strategic!” and you think to yourself – “Yeah, we want to be strategic!”  Its used car salesmanship at its finest!

“We don't have the skill 'in-house'.”  (As of right now. So, you would rather train a vendor on your industry, your company, your culture…or someone who will be with for the long haul?)

At this point of hearing the 'Why's', I like to ask – why don't you just 'Insource' it? “Insour…Say what!?”

Why don

't you just build the expertise in-house within your shop and do it better than a vendor will do it?

I think if you hire sharp HR/Talent Pros within your shop – there is nothing you can't Insource and do it better internally – I'm a firm believer of that.  Let's face it – no outside entity is ever going to have your best interest in mind – as much as you're going to have your own best interest in mind.  They'll tell you they will, but you have to look your leaders and employees in the eye every single day – they don't.  You are all in it together – the success and failure of your organization – who better, but you, to take on any project you have to do. I love Insourcing! I love the fact I can build in-house expertise, offer challenging work to my team, and do it for half the cost!

Insourcing has fallen out of vogue, basically because no one markets Insourcing.  Outsourcing has every vendor in the world marketing its benefits and features – no one is running commercials or giving you free drinks at conferences espousing the virtues of Insourcing!  To me Insourcing is a lot like Canada – we know it's a good thing but you have to work to get there and it doesn't have warm sandy beaches in January, so you forget about it and buy a ticket to Florida -and let's be honest – if Canada was really good for anything besides recycling and socialized medicine we'd be calling them a state like North Minnesota or something (Ha! I kid, FOT Canadians!).  But now is your chance – final HR budgets for 97% of HR shops are due any day now – and you have an opportunity to take control. Vote for Insourcing – change your direction in 2013!  Or pad that budget with a little extra travel and plan on coming down to Orlando a few times to see me at your local HR vendor user conference! You win – either way!

Have you tried Insourcing in your shop? What was your experience?


FOT Background Check

Tim Sackett
Tim Sackett SPHR, is the ultimate Mama’s Boy!  After 15+ years of successfully leading HR and Talent Acquisition departments for Fortune 500s and smaller technical firms, Tim took over running the contingent staffing firm HRU Technical Resources in Lansing, MI. Serving as the Executive Vice President, Tim runs the company his mother started over 30 years ago, and don’t tell Mom, but he thinks he does a better job at it than she did!  Check out his blog at Because he's got A LOT to say, and FOT just isn't enough for him.

One Comment

  1. Ed Baldwin says:

    Outsourcing or Insourcing is definitely a strategic decision and one not to be taken lightly. The two alternatives have distinctly different pro’s and con’s and I wouldn’t suggest either is a carte blanche right answer. It’s easy to get caught up in the latest fad and prescribe to the suggestions of a new book, a new business model, or a new piece of technology that is being marketed as “the next big thing”. And you’re right to suggest that maybe Insourcing needs its time in the spotlight. But prudent consideration and consultation with the executive team on where either strategy will land you after the “spin doctors” have left the room is an important role for all HR/Talent Pros.

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