Achieving Sustainability with Human Resource Outsourcing–Part 1

In a 2011 survey conducted by the Massachusetts Institute of Technology or MIT, 70% of registered companies in the United States have adopted sustainability programs in their business agenda. Sustainability programs are strategies that align the economic objectives of the company with its advocacy to contribute to the welfare of society and the environment. Put simply, companies that adopt sustainability programs must work to ensure that its strategies to improve the financial bottom-line do not come at the expense of compromising nearby communities and the environment.

Sustainability ensures that the company generates profit and success over the course of the long term. The idea behind sustainability programs is that it encourages companies to maximize the value of its resources to lower operating costs and minimize the incidence of wastage.

In recent years, food and beverage companies like “Starbucks” and “Ben and Jerry’s Ice Cream” have led the way in adapting the “3 R’s” in sustainability: Reduce, Reuse and Recycle. Starbucks has been encouraging its patrons to bring their own mugs to lessen the use of paper coffee cups and water by providing incentives such as pricing discounts. The Seattle-based coffee chain has also been promoting used coffee grind as compost and gives these away to customers who ask.

Ben and Jerry’s Ice Cream has been an advocate of sustaining the local economy of Vermont by contracting only local suppliers of milk and other organic produce.

Sustainability also applies to the human resource and optimizing their ability to contribute to the success and productivity of the business. Companies that implement sustainability programs tend to look “inward” and develop their own people by encouraging them to become more proactive in the decision-making process. However, businesses may not have the skills and competencies needed to successfully implement people-development programs. Businesses may also be hesitant to allocate budgets toward human resource development because people are generally regarded as difficult assets to manage.

Why you need to outsource human resources

The need to maximize the human resource without the inherent risk of managing and dealing with the unpredictable nature of people has increased demand for Human Resource Outsourcing or HRO.

Human Resource Outsourcing is the process of transferring the recruitment and selection function to a third party service provider. By re-aligning the HR function to a Human Resource Outsourcing specialist, the business effectively transfers the risk away from the enterprise and to the service provider. In the Philippines, acquiring HRO services has risen in popularity as an effective strategy for circumventing the risks associated with the country’s pro-labor laws.

While the Philippines offers the comparative advantage of having among the lowest wage rates in the world, the country also has some of the most militant labor organizations. The right to organize is protected and mandated by the country’s labor laws and has become an issue in the argument to regularize employees for the sake of standardization of services but risk work disruption due to stoppages.

In recent years, HRO has evolved from a process-based system that focuses on technical and fundamental competencies to a process that focuses on the behavioral component of the human resource.

Companies fear people because their irrational, emotional and unpredictable nature makes them complicated and complex to manage. But HRO specialists see these qualities not as hindrances but an impetus to development. Proponents of HRO acknowledge that the global business environment has changed and will continue to change as technology evolves, economies connect and barriers are torn down.

Change brings turbulence and the key to surviving turbulence is the ability to adapt. HRO views the behavioral component as crucial in developing this ability to adapt by identifying the patterns which discourage and impede performance and productivity within the organization.

By identifying these self-limiting beliefs and fears, people can face tasks, responsibilities and challenges head on with more confidence and assurances.

In Part 2 of this series, I will go in-depth in the process of maximizing human performance from one of the leading proponents of HRO, Light-Core, a behavioral-based business improvement firm from Toronto, Canada.

Outsource Workers
Brett Russo is a Licensed Real Estate Agent and who has over a decade of industry experience as well as being the Principal of a successful boutique Real Estate Agency in Australia.