Outsourcing is forcing many HR professionals to seek other paths. Four who made the change explain how their HR skills helped them to start new careers
» Workplace Epiphanies
Matt DeLuca’s career in human resources dates back 31 years and included stints with Chemical Bank, Bank Hapoalim, and Bank of Tokyo. Between multiple tours of duty in corporate HR, the most recent ending last December, he made the jump to author, consultant, and college professor.
Since 1991, Suzanne Gipalo, a self-professed Army-brat-turned-Georgia-peach, has built an insurance brokerage and consulting firm on the knowledge she picked up in 14 years as an HR professional with a predecessor of First Data Corporation.
In 1994, Steve Medici quit a 20-year stint as an in-house benefits and compensation specialist, mostly with Credit Suisse First Boston, to set up his own global outsourcing business.
Al Schifano spent 35 years as an HR executive, including instituting one of the first employee stock ownership plans while at The Sundt Cos., before leaving to enter the priesthood in 2001.
These individuals are all part of a group whose membership is no longer so exclusive—and whose ranks are expected to swell. Once part of any large or medium-size business’ organizational bedrock, human resources is undergoing a sweeping transformation as more of its features become standardized and executable by outside providers. Unless HR professionals can argue a compelling business case to justify keeping their activities in-house, many, if not most, are likely to find their jobs outsourced or given to financial specialists within the organization, says Omaha-based HR educator and author Robert Mathis. Already, some one-third of today’s HR job openings are outside the traditional corporate structure, estimates Dick Stone, who owns HR consulting firm Stone Group in Princeton, New Jersey.
The basic building blocks of HR will not go away, of course, and professionals who learn how to adapt to the new configurations stand a good chance of following them into their new settings. Roger Herman, a strategic business futurist and CEO of the Herman Institute in Greensboro, North Carolina, predicts that the outsourcing craze will create plenty of opportunities for entrepreneurial HR and benefit executives who are well-educated and business-literate.
Medici was vacationing on a beach near the bucolic Black Mountains outside Lake George, New York, when the idea came to him. He was reading Peter Van Oech’s book A Whack on the Side of the Head, which encourages thinking outside the box. “It occurred to me I could do exactly what I’d been doing from across the street as an independent operator and try to control my own destiny,” Medici recalls.
The following Monday, he approached his boss at the New York-based US investment banking unit of Credit Suisse First Boston about outsourcing its entire HR function. Medici and his staffers would form their own company and save CSFB a boatload of money in the process. The answer was yes, and Medici hired away his staff to form Black Mountain Group, a New York-based firm that takes its name from the place where he experienced his professional epiphany.
He calls the new arrangement with CSFB “outventuring,” which refers to HR professionals outsourcing their own jobs. One distinguishing characteristic is that the arrangement is initiated by and focused on individual employees and not the business. “It requires an individual commitment to a very different way of doing things,” Medici says. “It also provides the greatest opportunity for mutual success in that it aligns both parties’ interests.”
Black Mountain has grown to 130 employees in six countries serving about 65 customers. A sophisticated boutique provider of HR, compensation, and benefits outsourcing services, the firm also landed on the 2002 Inc 500 ranking of America’s fastest growing private businesses. In fact, Black Mountain’s growth rate during a recent five-year period was 500%.
Much of that growth reflects incremental work from existing clients. Several have pursued total benefits outsourcing, while some smaller firms in Asia have handed over all of their HR activities, and others across Europe are exclusively actuarial clients.
As outsourcing becomes increasingly widespread, Medici sees plenty of room for other HR practitioners to duplicate his entrepreneurial success. However, it is also important for them to be clear about their motivation. “If you’re looking to simplify your life, don’t do it,” he advises. “It won’t work. Running your own business is completely consuming.”
DeLuca began rethinking his career after receiving an overture from a small Wall Street employment agency, GM Personnel, that agreed to turn itself into an HR consulting firm. He accepted a full-time commitment after seeing an opportunity for synergies that would translate into growth for three staffers who have since gone from administrative recruiting assignments to full-service HR consulting for high-powered clients that included Nortel, New York University, Memorial Sloan-Kettering Cancer Center, major foreign banks primarily headquartered in the Pacific Rim, and even the Society for Human Resource Management.