St. Modwen on HR outsourcing: why we outsourced our HR function
To achieve the best outcomes from human resources requires a two-step approach. Firstly, a strategic, high level plan on how HR processes will help achieve a business’ wider objectives is needed. Secondly, it requires an on-the-ground transactional team who are the faces of the department, who oversee the day-to-day operations…
HR Outsourcing | Talent Solutions
HR outsourcing

To achieve the best outcomes from human resources requires a two-step approach. Firstly, a strategic, high level plan on how HR processes will help achieve a business’ wider objectives is needed. Secondly, it requires an on-the-ground transactional team who are the faces of the department, who oversee the day-to-day operations and ensure employees receive a white glove service. However, if there’s any clink in the chain of this set up, or if an issue suddenly becomes complex, both teams often become entrenched together meaning the HR function is put on pause.

As we face a post-pandemic war on attracting and retaining talent, increases in salaries across all sectors, the prospect of a five-generational workforce by the end of the decade and a very sudden shift to hybrid working, the chance of this happening is becoming more likely. And this is all happening as teams continue trying to balance keeping people safe, enabling their working preferences and retaining the cultures they’ve worked hard to develop over the course of years.

HR professionals get into the industry because they’re interested in how people interact with one another; they thrive on the emotional connection between people working in teams and at different levels in an organisation. So, when things do get tough, it can be difficult to remove emotion from challenging decisions. To overcome this, more and more businesses are investing into outsourced HR functions to enable all people working within a business to focus on its progression and achieving its strategic objectives.  

Taking the HRO route

Such was the case with expert property developer, St. Modwen. Having already reached out to Morson to discuss outsourcing its recruitment, the vast learnings following the UK lockdown and enforced working from home led the company’s HR team to explore the option of outsourcing some of its function.

Becky Cund, head of HR operations & sustainable people projects at St. Modwen, said:

“Our business is always growing; we’re progressive, fast-paced and as well as regularly hiring new employees, we promote internally a lot, too. This puts a lot of reliance on the HR team to support our line managers with people management and we had continuity challenges if any of our small HR team were ill or on holiday.

“I’ve got experience of poorly managed outsourced HR, so I was tentative; I’ve seen it become very impersonal, and seen providers never establish connections with internal teams. However, peers have seen it work very well – it was all about finding the right partner.

“We looked into the several different options on the market, but there was always some fall down. Companies might offer employer relations support but wouldn’t do typical HR administration tasks like payroll and holiday requests. Or they could do those operational tasks but wouldn’t help manage our L&D plans or liaise with our third parties such as our legal team or fleet providers.

“We’d already been speaking to Morson about outsourcing our recruitment, so we just put the question to the team. And while it wasn’t an existing part of the business model, we were told the skills were available in-house to do it. We were open to hearing the pitch and what we received was head and shoulders above anything else we’d seen or heard. There was some serendipity around it all; if we hadn’t been discussing recruitment resourcing, the conversation might never have happened.”

HRO in practice

Katie Winstanley, HR director at Morson, said:

“It was clear from our first interaction that the values and intrinsic beliefs of our HR experts and the internal team at St. Modwen were very aligned. There’s always differences between every organisation, but our priority was ensuring that the employees within the business would feel no disruption in delivery; we needed to be fully embedded with a consistent presence and a persona that matched St. Modwen’s brand.”

Morson was appointed to oversee the employee life cycle, from beginning to end – from onboarding after recruitment, organising company cars and booking people onto the induction programme, to managing holiday requests, administering payroll and overseeing relationships with outside suppliers, including St. Modwen’s legal support and fleet operators. Morson has built a core St. Modwen team, which is permanently focused on St. Modwen for 80 per cent of the time. Team members work on site and if remote, communicate from a St. Modwen email address. They attend weekly catch-up meetings and are involved in the planning and development of operational improvements, as well as feeding into quarterly reviews for a truly seamless delivery.

Becky said:

“All of these activities have SLAs assigned, but when Morson applied for the work the KPIs weren’t included in the contract. It was suggested we agree SLAs in partnership over a period of time, which dispelled a lot of myths for me; I wasn’t tied down to a supplier’s idea of what good looks like, we did it together.”

“You can’t work any other way – our approach was sculpted around St. Modwen’s challenges and the solution is fit for purpose rather than off the shelf. Having a core team means we are always ‘on’, while they benefit from the beauty of outsourcing during peaks and troughs because we can apply additional resource whenever it’s needed. We’re truly unified, to the extent that some employees don’t even realise the team isn’t an in-house entity.”

Achieving more together

Melissa Hewitt, senior group HR advisor at Morson – who acts as the leading HR interface for St. Modwen – said:

“So much has been achieved in such a short space of time. Primarily, the implementation plan was an example of true collaboration; this wasn’t something St. Modwen had considered for long, and not something we had a team already dedicated to. But we worked together to agree on what was needed and everything went smoothly.

“We’ve developed dashboards which not only provide rich data to St. Modwen on the things the transactions their employees are completing with our team, but also demonstrates the difference in the number of transactions being completed right now compared to before our solution was in place. What it’s revealing is that these transactions did previously exist and were important, but they are now more efficiently managed. We’re also using a ticketing system to demonstrate that our SLAs are being met; so far, we’re achieving them 98 per cent; five months in, that’s an amazing place to be.

“Once we have a year of our own data under our belt, we’ll be able to spot trends, too. For example, we’ll be able to say, ‘you had a spike of enquiries about annual leave in January, so let’s allocate some resources there to create tutorials on how to book leave through the system quickly and easily’. It’s about pre-empting, being smarter while developing a personal relationship with St. Modwen’s employees just as if we were an in-house function. We want them to feel our team prioritises them, and when people are picking up the phone to me rather than their line manager for things like payroll requests, that shows it’s working as it should.”

A more valuable future

Which companies benefit most from outsourcing HR? There are a few key criteria.

Katie said:

“Outsourcing your HR is particularly effective if a company feels their in-house solution could achieve more. If employees could use their time more effectively, if senior leaders are focusing more on tactical operations than on strategic delivery and if SLAs aren’t being met, these are all indicators that something must change.

“We understand companies have reservations about outsourcing, but we would never take on something if we thought there was a chance we could fail. The HR service is often the beating heart of an organisation, and we want to get that right. In the case of St. Modwen, we enforced a three-month trial period of our HR solution ahead of instigating an end-to-end recruitment programme; we wanted to prove ourselves and that move is paying off for us and for them.”

Becky added:

“This is our foundation year; we’re getting everything in place to ensure the service works for our people. We’re seeing positive outcomes already which is way ahead of where we thought we would be. In three years’ time, we want the HR service from Morson to be entirely self-sufficient – for them to be so ingrained in our business that we’re constantly finding added value, using their knowledge and insight to improve our business.

“We have an ambitious people strategy, but outsourcing is helping us to achieve the trajectory we need to grow exponentially. Any company on a similar path should consider it. If you’re looking into it, go with the company that proves it’s done its research into your business, and be clear on what you want to achieve from the partnership from the outset.

“Finally, don’t underestimate the importance of the relationship. Morson is an extension of our team, and it’s felt like that since the very first interaction.”

If you would like to find out more about outsourced HR and explore how outsourcing your HR function can transform your organisation, get in touch with Morson Group HR director, Katie Winstanley, katie.winstanley@morson.com

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