For over two decades now, much of the literature on the role of the HR function has tended to emphasize the fact that HR departments in organizations are seen as little more than administration departments. They are seen to add little value in the realm of human potential and capital management. Further, the bulk of work in HR departments in most organizations, is to do with routine transactional work such as pay-roll administration, applicant tracking, training and development record- keeping, performance appraisal follow-up, and human resource policy clarification.
Given the two-fold nature of the problem - lack of strategic inputs from HR because of high involvement with repetitive tasks, HR should be automated and/or outsourced. Outsourcing rests on the premise that activities that are core and central to the organization need to be performed effectively within the organization. Outsourcing of transactional HR activities offers cost-savings, standardization of processes, increased speed and quality of service. Effective delivery of transaction is the first step in the journey of the HR department towards becoming a strategic partner.
All major HR activities have operational and management components while strategy forms a very small portion outside of Organizational Development, Organizational Design and Compensation. The time of HR Heads that is freed up from transactional activities, can be better utilized in managing these strategic activities.