Question

The HR department in a musical instrument company is struggling to support the company's rapid growth. The company, which started as the home business of a casual musician, logged $17 million in sales last year. The HR department has hired additional team members over the years but hasn't changed its structure since start-up. All HR team members currently function as generalists, doing whatever it takes to support the company.

The organization now consists of multiple store franchises. Each store has a sales department, a service and repair department, and a department offering music lessons. This initial product and service offering was followed by instrument rentals and later the acquisition of a publishing company that specializes in learning guides for new musicians and music teachers. The company's newest effort, the production of their own brand of mandolin, is recognized by most of the senior leaders as a high-risk effort but with the potential for a profitable high-margin instrument being added to their product line.
With the rapid growth and expansion, the CEO is becoming increasingly concerned about quality and has made it clear that the entire corporation is to prioritize quality and efficiency while maintaining focus on the strategic plan.
What is the most critical step the HR director should take to determine if outsourcing a non-core function is more efficient than the current process?

A. Develop a project plan that outlines how to move from the current process to an outsourced model.
B. Complete an analysis of current gaps in the process and evaluate this information in terms of the benefits of an outsourced model.
C. Review recent survey results that capture employee impressions of the current recruiting process.
D. Identify a list of the most reputable vendors with a track record of delivering efficient and quality service.

Answer 1

To determine if outsourcing is more efficient than their current HR processes, the HR director should conduct a gap analysis of current inefficiencies and assess how outsourcing could address these issues, considering the long-term impact on retention and hiring practices.

Step-by-step explanation:

The HR director should focus on identifying current inefficiencies in the HR processes to determine if outsourcing a non-core function could be more effective. This involves:

1. Completing a thorough gap analysis of the existing HR processes to understand where inefficiencies or bottlenecks exist.
2. Evaluating how outsourcing might address these gaps, bringing in specialized expertise, and potentially offering cost savings and quality improvements.
3. After the analysis, developing a cost-benefit comparison of in-house vs. outsourced services for informed decision-making.

It's crucial for this analysis to consider not only immediate costs but also the long-term impacts on employee retention and hiring practices, ensuring that outsourcing aligns with the strategic goal of prioritizing quality and efficiency.