This article assesses the likely HR implications of recent changes in the structure of the outsourcing market. It also suggests ways in which the HR function can become a contributor of solutions, not obstacles, to the smooth running of outsourcing projects.

Outsourcing has come of age over the last decade, with resulting shifts in the pattern of employment. More and more organisations have outsourced both core and non-core functions to specialist service providers and, as services have passed one way, jobs and employees have passed the other way, from customers to service providers. But despite the maturity of the outsourcing model and its by now broad acceptance as a management tool to increase companies’ efficiency and profitability, in many cases the biggest stumbling blocks to the smooth progress of an outsourcing project remain the HR issues. This need not be the case. There are some basic structural steps which, if followed in an outsourcing transaction, will help to reduce the potential for HR issues to de-rail a project or get blown up into potentially deal-threatening problems.