There are successes and failures – depends on many factors for the carve-out unit. Sometimes what I have seen as most successful is the parent entity from which the unit was carved out continues to perform the HR function for the exiting unit while they build out their appropriate team. Factors to consider include industry, size (both revenue & headcount), geographic reach, internal capabilities, and the strategic plan. There is a point in a business life cycle where it is more cost effective to outsource to an ASO or PEO. However, there is also a point where insourcing is not just more cost effective but it also provides the level of command and control to align HR with organizational priorities that cannot be achieved through outsourcing. Use these a guides when considering what to do with your carve out. Always make sure you retain or obtain strategic HR leadership to advise on the options but also to lead the HR function regardless of outsourcing or retaining inhouse.
