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Outsourcing: Is it Right for Your CU?
Monday, July 7, 2014 7:00 AM

The outsourcing of functions such as HR, compliance, IT, etc. has accelerated over the last decade, and according to Steve Gibbs, assistant vice president of Credit Union Resources’ Shared Compliance, will likely continue to do so. Outsourcing, Gibbs says, allows organizations to offload work that isn’t part of their core business. It also saves money.

“Outsourcing is a reliable and economical method of getting specific tasks accomplished without having to unnecessarily hire additional staff,” notes Gibbs. “It can increase productivity while maintaining a conservative budget.  It also eliminates the need for additional benefits.”

Management, lending, IT, compliance and HR are the most common functions that are being outsourced today.

“Outsourcing has many benefits. It allows an organization to contract expertise, and enjoy the savings of a limited contract vs. a full-time employee,” adds Gibbs.

While outsourcing has its benefits, if not managed properly outsourcing can have its downsides:

  1. Less control over who is assigned under the contract;
  2. Lack of consistency – potential of switching assigned contractor from job to job; and
  3. Absence of the individual performing the contract between visits.

“Outsourcing can yield positive results for an organization, but you have to make sure that your wants and needs are covered in your contract,” continues Gibbs.

If your credit union is considering outsourcing some function of your operations, Gibbs offers the following tips:

  • Outsourcing can be a very effective solution for many organizations; however, appropriate due diligence should be followed.
  • Make certain that you understand the full service that the contractor is to provide.
  • If you have a problem with the person(s) assigned, don’t hesitate to contact the outsource company and share your concerns.

Helpful Resources:

Shared Compliance: Through Resources, credit unions can hire a compliance specialist who divides their time among assigned credit unions. These specialists can develop, manage and maintain an effective compliance program for the credit union; provide a risk assessment of existing compliance system, and monitor and analyze new and revised laws and regulations.

Shared HR Services: Also available through Resources, credit unions can outsource one or all of their HR functions. Shared HR Services can handle a credit union’s HR needs from management consulting and compliance assistance to policy development, maintenance, and employee issues.