Outsourcing or In-House Investigations?

Vince Scopelliti - Thursday, October 03, 2019

For many businesses, one of the critical HR questions is whether investigations into alleged employee misconduct or misbehaviour should be outsourced or conducted in-house.

Depending on the nature of the business and the complaint, it may not always be appropriate or cost-effective for investigations to be referred externally.

However, in other circumstances, particularly when the allegations involve potential criminal conduct or there is an actual or perceived conflict, outsourcing may be the best option.

We examine the different circumstances in which investigations might best be outsourced or kept in-house.

outsourcing vs internal 

The key benefit of conducting workplace investigations internally is the ability to potentially deal with a matter swiftly and cost-effectively. The obvious reason here is that staff tasked with conducting an internal investigation, already have an understanding of the internal processes and procedures of the business. Although time away from normal duties is likely to be required, there is no additional cost associated with tasking existing staff to conduct an internal investigation.

On the other hand, depending on the nature of the allegation, existing staff may be lacking in capacity or capability to properly conduct the investigation. This is particularly likely to be the case if the allegations relate to potential criminal conduct which requires police involvement.

In addition, if the allegations are sensitive or have been made against a staff member who would ordinarily be involved in conducting the investigation, it may not be appropriate for the investigation to occur internally.

Whether the investigation is outsourced or conducted internally, it is essential that there are clear delineations as to who will be conducting the investigation. Further, the ultimate investigator must be provided with the applicable investigation policy and procedures which must be followed.

risks of handling an investigation in-house

As noted, there are numerous potential risks of handling an investigation in-house. Chief amongst these is the fact that the internal staff may lack the necessary skills or training to adequately understand the complex nature of the investigation. This could have significant ramifications if there are demonstrable gaps in the process, as this may ultimately invalidate the findings and any final decision which is made.

Having staff without the requisite experience or skills, conducting an investigation may also mean a failure to comply with legal obligations. In the event that the investigatory process results in termination of employment, litigation or other legal action, any failure to duly comply with all the legal and regulatory requirements, may potentially result in an adverse decision for the company.

The possible apprehension of bias in an internal investigation is significant, particularly if the employees who are conducting the investigation have a close personal or professional relationship with the complainant, the respondent or any of the witnesses. In a small company, or in a situation where a member in a senior leadership position has allegations levelled against them, this potential apprehension of bias is even greater.

This could also result in complaints of pre-determined outcomes, where staff involved in the process may argue that the investigation was not conducted in accordance with the principles of procedural fairness. Any relationship (whether positive or negative) between the investigatory staff and the parties involved in the investigation is likely to come under significant scrutiny. This may open up the investigatory team to suggestions that the investigation was not conducted impartially or fairly.

Factors for considering whether to outsource 

Impartiality and transparency in the investigative process are always crucial considerations. In situations where there are especially sensitive allegations or the staff involved are likely to resort to post-investigatory litigation, any potential concerns regarding failures in process or impartiality can be addressed by outsourcing the entire investigation.

Similarly, if time is of the essence (particularly when staff have been temporarily stood down and it is important that the investigation process is concluded in an expeditious fashion) outsourcing the investigation may be the preferable outcome. 

This is because external investigators are able to devote themselves completely to the investigation process, while existing employees will most likely need to continue on with their day-to-day work.

the benefits of outsourcing

Although there is a cost associated with the outsourcing of an investigation, there are added benefits. Investigators with specialist expertise are able to deal with complex matters, and are best placed to provide reports which are more likely to be relied upon by the Fair Work Commission.

The majority of contemporary workplace investigations come with their own set of challenges and complexities. If you do not have the time or resources to conduct an investigation or you require an experienced investigator, WISE offers both supported and full service investigations to best assist.  

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