Astute HR gains momentum since Columbus deal

Astute HR, a division of the AST Group, has made a name for itself over the last year by winning the Columbus Stainless human resources outsource contract. This contract, worth more than R120 million over the next five years, has been the first of its kind in the manufacturing industry to involve the entire human resources function for a large exporting and hi-tech corporate.

Columbus Stainless is a R6 billion turnover business that has a high degree of complexity and subsequent dependency on skills and people contribution in its technologically advanced and export-driven business.

In reviewing the past year`s activities, Astute HR operations director Werner Guse commented: "The last year been very good from the perspective that the market is now adopting the trend to outsource human resources management and related services."

The outsourcing premise brings the expectation of a number of benefits associated with increased economy of scale in staff functions. The obvious benefit is one of reduced costs as infrastructure and resources are shared between companies. This may furthermore bring professional services of a high standard to companies that would usually not be able to afford it.

In practice, the true value probably resides in the potential to simply put straight the value-add and contribution of staff departments in larger corporates. HR departments notoriously struggle with an ever-increasing administration burden, to the extent that little value is generated through truly leveraging the very important human resource asset in business.

"Astute HR`s approach is a simple one. We sort out the administration confusion with advanced information technology, a clear management philosophy and a consistent drive to process improvements and standardisation," adds Guse. "This empowers the human resources team to strategically focus the people issues that would drive competitiveness in the business."

Columbus Stainless HR manager Jo Mabena confirms this view: "The Astute HR team has been quick to roll-out HR systems. In this case, SAP R/3 on an application service provider model, while at the same time playing a major contribution role to competitive issues in this business."

Columbus Stainless has been through a turnaround with its assimilation into the Spanish group Acerinox last year. The company is well known for its innovative HR practices and has among others implemented comprehensive goal deployment and performance management practices throughout the organisation, managed a stable labour relations environment and succeeded in bringing lean manufacturing practices to its shop floor.

But large HR BPO deals are not the only hallmark of Astute HR. "We are seeing tremendous growth in the market need for distinct HR component outsourcing services. In particular, the need for Payroll and HR administration services is growing rapidly, as well as technical training offerings," notes Guse.

In both instances, Astute HR has proven itself with leading clients like 3M and BHP Billiton in these domains. Technical training services are especially interesting since many large corporates in the mining and manufacturing sectors have closed down training facilities as part of major rationalising programmes in the nineties.

Increased focus on competitiveness, as well as the wakeup call from the recent national skills development initiatives have, however, highlighted the critical role these facilities can play. Companies like Astute HR can provide highly customised and needs-based offerings in the technical skills area. Astute HR seems to take a niche in this market with its outsourcing, and in particular, synergistic deal-making approach with its major clients. More than 65% of its revenue resides in annuity and long-term contracts.

The company remains confident of the future. "We are in the process of a number of feasibility studies in major industrial growth areas in the country. There is a clear need for these services, but only the most astute and professional of providers will eventually own this market," concludes Guse.