The mindset of HR professionals in India towards HR services has not radically changed over the years. The problem does not stem as much from the HR service industry as it does from the HR professional within the organization who is hesitant to give away what s/he believes is the delusion of power. When an organization decides to outsource a particular part of operations, the people within the department may be led to believe that their importance and strategic impact to the business will go down. This is one of the key reasons why the HR service industry in India has not grown as much as it should have over the years. That said, driven to a large extent by the advent of technology, the HR industry is set to grow as organizations will now look to increasingly employ services and impact the business as a strategic partner.

At Tata SIA, the HR organizational model is a heady mix of external partners who collaborate with the internal HR team at all stages of the HR operations process. Most of the transactional work, including recruitment, technology, compensation, and operations will be managed by external partners. While learning design will be retained in-house, most of the learning delivery will be done through external partners. The organization will also actively work with advisory and consulting organizations on matters of organizational structuring and design. The HR function, therefore, will take a completely take a strategic role and work closely with the business towards business goals and objectives through the levers of human capital. Such a transition is difficult to bring forth, but human capital management in mature markets is defined by the ability of the HR team to impact business metrics.

The impact of technology on the HR industry cannot be undermined. Cloud has made a significant impact on the way HR looks at services and cost efficiencies. The ability of the cloud to bring down cost, through lower licencing expenditure and increase efficiency through partnership with an experienced technology service provider, which has access to best practices of other client organizations, is a huge influencer.

The Indian HR market is on its path to maturity. While service providers continue to become more crucial partners of HR, it is for HR professionals to trust and enable this transition. Only then can we expect bigger and better things from the market. One cannot continue wearing an old-shoe living with the fear that a stiff new-shoe will hurt. HR professionals in India need to bring forth that change in mindset.

As told to People Matters