Outsourcing HR Enables Focus on Practice Challenges on Memphis Medical News

Outsourcing HR Enables Focus on Practice Challenges

By: Michael Bruno

A few years ago, the term outsourcing generated considerable public discourse when many domestic call center jobs moved to India and other global sites with low labor costs. The reality of outsourcing today is much more mundane, as many businesses outsource a variety of business functions with great success. While medical practices, specifically, routinely outsource back-office functions such as IT, payroll, billing and collections, they lag their counterparts in the general business community in the outsourcing of human resources services.

Why should a medical practice consider outsourcing HR? Focus.

This point was recently reinforced to me, ironically, in an article on a completely unrelated topic. In Physician Practice Pearls (online version, March 19, 2009), consultant Owen Dahl argued against ancillary profit centers in practices thusly:

"In this time of economic uncertainty, the most important thing you can do is focus on what you do well. Identify your core competencies; excel in these services and your practice sends a strong message to patients that they can count on continued quality, compassion and care that you have always provided."

In these two sentences, Dahl gives us a simple, yet powerful, case for outsourcing HR, as reclaiming focus is indeed a key driver in considering alternative HR delivery. There is, after all, a finite amount of time an administrator can devote to core practice objectives – delivering high-quality patient care while maximizing cash flow – and it's no secret that managing people and related employer-related administration cannibalizes a great deal of this time. Add the myriad challenges practices face today – legislative upheaval, margin compression, no-shows, hiring good employees – and it's clear that focusing on the basics makes sense more than ever.

And, let's face it: Many medical practices – especially smaller ones – simply aren't equipped to deliver expert human resources. And assigning HR-related duties to a CFO, controller or business manager – a common approach – can be counterproductive, as the delivery of HR often takes a back seat to the finance-oriented staff member's primary job.

Given that the effective delivery of HR requires considerable expense (salary, benefits, overhead) and time (management, training, continuing education, certification), why aren't more practices outsourcing HR?

I believe two significant misconceptions about outsourcing HR hinder its wider adoption. First, outsourcing human resources doesn't mean abdicating the employer's responsibility to its employees. On the contrary, it can solidify – and even improve – its commitment to them, since HR is no longer ancillary as referenced above. Second, outsourcing HR doesn't necessarily eliminate HR staff altogether; larger practices, for example, often have senior HR practitioner(s) on staff, tasked with stewarding the overall human capital strategy while outsourcing tactical HR functions. In this scenario, the quarterback remains the same – just some of the players are different.

Should a practice decide to explore outsourcing, here are some things the administrator should consider as this option is explored thoughtfully:

1. Be transparent in the reasons for outsourcing HR, and align deliverables from the provider accordingly. A human resources partner can uncover sources of internal practice conflict, for example, and help in proactively transforming the culture from inside out. If the objectives center on more transactional HR – updating handbooks, conducting background checks, for example – be clear concerning your expectations.
2. Don't view your outsourcing provider merely as a "vendor," but as a true partner. In his book, Getting Partnering Right, sales guru Neil Rackham positions intimacy as an essential element of effective partnering in today's business environment. Outsourcing – and especially HR outsourcing – is nothing if not a professionally intimate relationship, and one in which trust, honesty and open dialogue are critical to a successful business outcome.
3. Focus on overall value and ROI – not cost. Outsourcing is a proven way to improve operational efficiency and allocate internal resources more effectively, not necessarily a way to "save money." While net savings can occur when outsourcing a particular business function, this should not be a primary driver to outsource.

Outsourcing human resources is one of the most serious business relationships a medical practice can pursue. It can also be one of the most rewarding, by allowing administrators and key managers to focus more squarely on profit-impacting aspects of running the practice in the midst of an increasingly challenging environment.

Adams Keegan, Inc. is a Memphis-based provider of comprehensive outsourced human resources programs and administration. For more information, please visit www.adamskeegan.com.

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