Neil Jensen of Knowledge Infusion recently highlighted an article from Inc.com entitled "Meet Rebecca, She's Here to Fire You", which profiled the growing trend of companies to outsource many talent/HR functions, including the termination. From the Inc.com article:
"Welcome to the final frontier of human resources: the outsourced termination. The popularity of HR outsourcing and consulting, which was in its infancy only a decade ago, has exploded in recent years. Worldwide, the industry now accounts for $88.7 billion in spending, according to IDC (NYSE:IDC), a research firm in Framingham, Massachusetts. Big companies are responsible for much of that spending, but small companies that have traditionally relied on professional employer organizations, or PEOs, to manage payroll are increasingly outsourcing more complex tasks such as recruiting, performance reviews, and, yes, terminations. Rebecca Heyman's boss, TriNet founder Martin Babinec, says that demand for these services is growing so fast that he now does as much revenue in a given quarter as he did in all of 2002, when he booked $22 million."
"In an outsourced firing, a consultant typically meets with a CEO to script and rehearse the big conversation. On the day the ax falls, the consultant sits in on the meeting, taking notes and making sure the manager stays on message. "We're sitting right there," says JP Magill, co-founder of the Achilles Group, a Houston company that provides termination and other HR services. "And our client has exactly what they need to say written out verbatim."
Neil correctly points out in his post at KI that companies outsourcing emotional items like terminations face a potential image hit as they try and attract future talent. My take? The process described below is pretty close to what a competent HR person would provide for a business leader. If the company has a viable HR pro, the role should never be outsourced. However, if a smaller startup has outsourced their entire HR function, looking for some help is a good idea. The description above is the way to go in this circumstance, with the business owner taking the lead in the communication of the business decision.
A bigger concern is the quality of the outsourcing firm. Since many PEOs have their roots in transactional processes, like payroll, they may not have the chops to effectively guide the business leader who needs the consulting. Poor consulting is the bigger risk in this scenario.
Leave it to Jamie Kennedy to keep us on theme but lighten this up a little bit. If you aren't aware of Jamie Kennedy, he's an actor/comedian (see his role as B-Rad in Malibu's Most Wanted for a gem) and the creator of a show called the Jamie Kennedy Experiment. JME is a show similar to Candid Camera - and in the episode below, Jamie poses as a business owner who runs an employment ad, then hires a manager after a minute long interview. The manager's first task? Fire five employees because Kennedy doesn't want to. Enjoy the outsourcing clip and have a great weekend....
Terminations are usually not easy. I feel outsourcing it is just awful!
"You have worked her for 2 years loyally, thanks! By no fault of yours, our numbers are down & everyone else has been here for 4 years+. Now this stranger is going to tell you that you will no longer will receive a pay check. Awful.
Posted by: Recruitnik | November 23, 2007 at 12:38 PM
I think any company that outsources its terminations will end up with a huge PR problem.
Also, the ability for a manager to manage the remaining personnel would be very negatively impacted by 'not being able to manage a termination'.
All in all a very bad idea!
Posted by: image consultant | November 26, 2007 at 11:32 AM
I can't think of one reason I would recommend outsourcing our company's terminations. Can you imagine the perception issue in the local market not to mention employee morale!
Posted by: Jennifer | November 26, 2007 at 12:34 PM
Don't have cash to buy a car? Don't worry, because this is real to get the home loans to work out all the problems. Hence take a small business loan to buy all you need.
Posted by: FreemanJody23 | February 08, 2012 at 02:24 PM