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HRO Today Forum Preview Just the Facts, Please HR is not the last to embrace evidence-based management, but it still mustn't dawdle. By Paul Kearns Those of us in HR with long enough memories will recall BP's decision in 1999 to ask Exult to look after its global human resources administration and management—at a cost of $600 million. Shortly afterwards, as the teething problems mounted, BP's HR director left the company. Whether he left under an outsourcing cloud or not is debatable, but it soon became clear that BP's outsourcing problems were primarily due to very complicated and messy administrative processes. Seasoned outsourcers know that streamlining administrative processes is a necessary precursor to efficient outsourcing; poor processes limit economies. Yet the key lesson here is not about processes, per se, it is about not expecting outsourcing vendors to solve your problems if you are not sufficiently committed to resolving them yourself. Since those early days, many other lessons have been learnt, and HR outsourcing should now be ready for the next big step—evidence-based HR (EB-HR). To make this shift, though, is not easy, and will involve a significant shift in professional HR standards. One of the main drivers of HR outsourcing, from the very beginning, was the prevailing view that HR needs to minimise the cost of its transactional and administrative tasks. Only [8] HRO TODAY GLOBAL | SUMMER 2013 then, the theory goes, can it fulfill its primary roles of strategist and business partner. Recent history has severely tested the veracity of this theoretical model. New Rules 1. Pernicious organizational cultures always end in disaster. The global financial crisis and disasters such as BP's Gulf of Mexico fire (and its Texas refinery fire and Alaskan pipeline leaks) have exposed serious flaws in corporate governance. These have been compounded by an increasing perception of executive compensation as excessive, often focussed on short-term profits at the expense of long-term performance and sustainability, and built on ill-conceived cost reduction programmes. HR, at the highest levels, has managed to get itself into a nowin situation. If all of this was none of HR's doing, it is an admission that HR is not part of the strategy. Conversely, if HR had a hand in this, then it needs to re-think its role. Banking staff and BP engineers had highlighted problems that were brewing but were never allowed to prevent them. Such a culture would never be allowed to develop if an effective HR strategy was in place.