The 4 human resources solutions

Four different source, internal resources, outsourcing, contractors and consultants, should be considered to answer human resources needs. They should be analyzed with the considerations already addressed in an earlier article.

 

We will in this article sum up and shortly define these four sources and study them based on the following 20 dimensions:

 

 

Dimensions	Internal resources	Contractors	Consultants	Outsourcing
Criticality & urgency	Critical or based of your activity but you need to have the time to recruit	Non-critical with an urgency or cover peak of charge	Critical but additional specific abilities or knowledge	Non-critical or less core. Critical but under particular outsourcing forms
Productivity	Standard in the continuity. Dependent of the profile and the individual	Mostly high by experience and knowledge. Also due to the contract and independence	Dependent of the profile but mostly high as he/she produces what would take much more time or be impossible to produce by internal resources	Managed thru the contract and depends upon the T&C’s
Training, knowledge & expertise	To be maintained. Additional costs. Depend of the recruitment process. They should be trained and educated.	At charge of the contractor. Make sure he/she relies on training programs or on a structure ensuring it. Specialist.	It is hired for that reason. Make sure it has the needed expertise and knowledge. Experts.	At charge of the outsourcer but should be specified in the contract as it can lead to inadequate resources. Should be trained and educated by the outsourcer.
Instruction & management	As the relationship is hierarchical, instruction and management is the responsibility of the company or organization. It requests time and competence but ensure a narrow control.	Lower thru expertise but still some instruction and management should be made by the company organization. This can be reduced if the contractor is part of a company.	Low as he/she is expert in her/his domain. But sill some follow up as to be ensured which can be reduce if the consultant is part of a company.	Indirect. Thru the relationship and the contract. It is the responsibility of the outsourcer.
Commitment & motivation	Depends upo the mmanagement, the environment, his/her conditions, …	Stable to high as he/she is independent of the company or part of antoher company. In case he/she is part of another company it will be managed too as part of the core business	Stable to high as he/she is independent of the company or part of antoher company. In case he/she is part of another company it will be managed too as part of the core business	Same as for your employees/. They are employees of the outsourcer. Make sure it is managed and ensure some control.
Behaviors	Under control as part of the company	Less controlled. Make sure your providing company manages it.	Less controlled. Make sure your providing company manages it.	Dependant of the relationship and control on the outsourcer. But control from your company on the employee is the weakest of the 4.
Integration	Very integrated as part of the company	Integrates thru the activity. But less integrated than employees. Make sure this is followed by his company	Integrates thru the activity.	Depends of the relationship with the outsourcer but mostly weakly integrated.
Control & support	Controls and support are part of the needs. It is the role of the company to manage it.	Less support needed but still controls on the deliverables.	Few controls needed	Managed by the outsource but anyway the outsourcer has to be controlled and supported.
Schedule	As defined by the law and the contract	Mostly flexible.	No Schedule	As agreed with the outsourcer and mostly dependent of the law
Regularity and continuity	Long term	Short and medium term	Short and medium term	Medium to long term
Dependence	The employee is dependent on the company.	Few dependence if the consultant is standalone. Few dependence towards  the company byt dependence towards his company in case he/she is part of one.	Few dependence if the consultant is standalone. Few dependence towards  the company byt dependence towards his company in case he/she is part of one. But dependent of the image.	Depenent of the outsourcer. Depends of the power relation you have with the outsourcer. Are you important customer or not.
Premises & infrastructure	At charge of the company	Lower needs if flexibility in the location. Mostly tools are at charge of the contractors except if he has to work on the IT and tools of the company, or on premises	Generally at charge of the consultant. Except space is needed when present	At charge of the outsourcer
Reporting		By the contractor, the standard process of the requestor and eventually the company of the contractor	By the consultant and eventually his/her consulting company	By the outsourcer
Pay & C&B & costs	Full TCO should be done:	Clear: defined by the contract mostly one fee and out of pocket	Clear: defined by the contract mostly one fee and out of pocket	Clear defined by the contract
Termination	Depends of the legal contraints	Easy and fast. Can be replaced easily surely if dealt with a company.	Easy and fast. Can be replaced if needed but depends upon the expertise. Easier if part of a company.	Complicated as you should undergo a new sourcing process, phase out the preceding outsourcer and phasing in the new sourcing solution. Bridge can be ensured by contractors.
Flexibility	Flexibility in function of the law and his/her contract	More flexibility	More flexibility	Depends upon the agreement with the outsourcer
Emotions	Emotionally impacted by the decisions and changes in the company.	More objectivity and less emotional	More objectivity and less emotional	More objectivity and less emotional

 

There is no need except in case of urgency or peak of workload to use external resources for core business activities. However, it is not coherent for specific capabilities and knowledge that you will not need a second time to recruit internal resources. Why choose recruitment when you need flexibility or when are not sure you can maintain or need to maintain a position? Why not outsource part of your less-critical activities to reduce costs, improve expertise or increase some flexibility? All these are example justifying the consideration of the different options. Making a choice among the four options is conditioned to your need and your constraints.

Finally, correctly selecting these resources in function of their specificity is essential. Read further our article on the advantages and selection criteria for external resources.