While considering working with an external HR provider you need to choose a service provider which consistently demonstrates high levels of technical skills and service delivery, integrity, honesty, efficiency, and communication skills. It is fairly straightforward if you ask the right questions.
Related: A guide to outsourcing HR
HR requires such high levels of technical knowledge these days that unless it makes sense to buy in expertise as and when you need it. The best way to find a good provider is to ask for recommendations from contacts whose business judgment you trust. Here are some important due diligence questions to ask all potential HR suppliers when looking for the right outsourcing partner for your business.
Cost
How much will the service cost? What does it include? Find out whether there is an implementation fee or additional ‘extras’. What are the terms of the contract? Are these clearly expressed and agreed? What are the charges if you want to increase the service or buy additional services? How long will you be tied in to the contract and how easy is it to end it if things don’t work out?
Reliability
Ask the prospective supplier how long it has been in business? How many offices does it have? How many employees? What is their history and experience in the business?
Flexibility
Does the supplier have the capability to scale up its service as the HR demands of the business increase? Is it prepared to reduce its offering if the shape of your business changes or times get tough? Has the supplier got sufficient breadth of skill and the necessary resources to grow alongside you and work as an extension of your business?
Experience
Who will be working on your account? How are they recruited and trained? What experience do they have? Find out how they propose to get to know your business and the people who work within it.
References
Ask for several client references so you can gain a proper insight into the experience of working with them. Were the clients happy with the result? Do the clients still use them? Have the clients ever referred someone else to use them?
Delivery times
Make sure the supplier agrees to provide realistic deadlines and goals. How do they allocate work? How is work planned and prioritised?
Data security
What measures will the supplier take to protect your data? What back-up and disaster recovery strategy does it have in place?
Risks
What kind of risks are you going to be undertaking in outsourcing this work? Is the supplier insured? What is their insurance coverage? What action will they undertake if they make a mistake or fail to deliver on time?
Communication
The level and type of communication can make or break an outsourced activity’s success. Find out who your employees will speak to when they have a query. Large organisations tend to offer large call centres which can mean a frustrating and impersonal experience for the employee. Will the service be customised to your needs? Some outsourcing providers force you to follow their processes while others will be prepared to deliver a more tailored service. Make sure that you speak to the prospective leader so you are sure that the team members will be able to work together successfully.
Culture
Will the supplier fit with your culture? The culture of a media company will be very different from that of a financial services firm, so make sure any prospective HR supplier can fit in with the your working style and values. What beliefs does the company have? Do you feel that things will work when talking to them?
Will the supplier be part of your team? A good HR provider will ask about your business plan and assess not only what services you need today but consider what you will need in the future as the business grows and how much it will cost you.
Kate Russell is an entrepreneur and the managing director of Russell HR Consulting.
Further reading on outsourced HR
