This Week's Herman Trend Alert

Leadership in Normal 2.0

  The Herman Trend Alert

March 3, 2004

Outsourcing, Insourcing, Resourcing, Flexsourcing

Bulletin: During the past two weeks, we've seen a marked increase in employees planning to leave their employers within the next few months. Now is the time for HR professionals and corporate leaders to learn about workforce trends and strategies to retain top talent. See

Worker-employer relationships are changing. In addition to the full-time, part-time, and job-sharing options, employers are developing and enhancing alternative relationships with other employers and individuals in contingent arrangements.

Over the next few years, outsourcing will increase at an increasing rate. For-profit corporations, not-for-profits, government agencies, and school systems will all distribute work to outside contractors. As more small companies are formed to meet the exploding need, expect an increase in the number of outsourced services providers. We will see smaller companies in this field because of the requirements to be highly responsive and have close personal relationships with hosts (the outsourcers).

A twist on outsourcing, insourcing involves work done inside the organization's workplace by people who are employees of an outside company. The workers perform in what is described as a "seamless" or "transparent" environment. If you did not know they were actually employed by another company, you would believe they were employees of the host organization. This application is being used for human resource services, staffing, training and development, information technology, logistics, and maintenance services. Companies are able to reduce their payroll, increase accountability, and still keep the functions together in one work space.

Resourcing describes finding people to work for the company on a contract basis as outside resources. These workers are self-employed and invoice the company---or a broker---for their services. They may work inside or outside of a customer's location, at a number of locations where assignments need to be done, or in their own facilities. Performing prescribed duties on a long- term or short-term basis, service technicians, interim executives, project managers, and programmers can fit into this category.

Flexsourcing brings individual workers to the employer when they are needed. They are seen now as temporary employees, but their role is to provide a flexible workforce, responsive to changing needs. Some of these workers will be employees or contract resources of staffing companies. Others will build their own relationships directly with employers, much like substitute teachers.

The corporation of the future will feature these kinds of contingent relationships with far-reaching implications for both employers and workers.

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