5 Things You Should Never Outsource (and 5 You Should)

Last Updated Jun 2, 2011 1:42 PM EDT

A few weeks ago I interviewed Burton Goldfield, president and CEO of TriNet -- a company that takes over the task of HR for small to medium-sized businesses. In our flat world where it can seem as though every organization is clamoring to outsource everything, I thought it was refreshing to hear someone speak up against what NOT to outsource.

According to Goldfield, here are the five things you should keep in-house:

  • Corporate culture. This can't be forced; employees are the ones who drive and determine the "feel" of the office.
  • Termination management. This is never fun, but ultimately a manager (and potential leader) needs to be able to meet face to face with their employees and deliver both good and bad news. Using outside advice and counsel for assessments and outplacement is very acceptable.
  • Succession planning. The vision for your organization must be owned by the leadership team. An outside perspective is helpful, but only you and your team can determine when and who should be promoted to senior leadership positions.
  • Employee development. Industry best practices can help here, but you know your employees better than anyone. Their future lies with you and it's important that you take the time to develop his or her career. There are excellent training courses and online learning that can make up a part of this development.
  • Retention. The market is improving and new jobs are opening up. Keeping employees happy is one way to keep them from jumping ship. Employee turnover is ultimately in your hands and needs to be a priority.
Is there anything worth outsourcing? According to Goldfield, there are several things that companies should outsource to the experts:
  • Payroll. This is complicated and needs to be kept confidential. Minimizing access and keeping it out of the office is one way to do this.
  • Recruitment. The market is flooded with qualified candidates. The best use of your time is not weeding them out.
  • Taxes. Tax laws can change on an annual basis. Keeping up with these changes is nearly impossible and the penalties for mistakes are expensive. This increases exponentially if you operate in multiple states
  • Benefits. Much like taxes and payroll, negotiating medical plans on an annual basis takes away from focusing on core business issues.
  • Performance management. Studies that show a significant increase in both employee and business performance when a company closely ties individual goals to overall strategy. However, annual reviews traditionally tend to be more of a historical review of the past year and don't necessarily ensure that an employee's performance is aligned with corporate goals and objectives. A third party perspective is helpful here. It is important to distill the key goals of the CEO and cascade them to each and every colleague in the company using state of the art processes and systems. Each of these goals must be specific, measurable, attainable, realistic and timely.
Now it's your turn. What does your company keep in house or outsource and why?

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    Robert Pagliarini is obsessed with inspiring others to create and empowering them to live life to the fullest by radically changing the way they invest their time and energy. He is the founder of Richer Life, a community of passionate people who want to learn and achieve more in life and at work. He is a Certified Financial Planner and the president of Pacifica Wealth Advisors, a boutique wealth management firm serving sudden wealth recipients and affluent individuals. He has appeared as a financial expert on 20/20, Good Morning America, Dr. Phil, Dr. Drew's Lifechangers and many others.