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Employee engagement in the UK remains stubbornly low. However, by identifying and proactively managing the key drivers of employee engagement, and creating a balanced and meaningful rewards framework, McDonald's in the UK have significantly enhanced the commitment and performance of their workforce.

• The article explores the current practice of outsourcing aspects of HR activity. • The extent, rationale for and nature of outsourcing within the HR function in 60 UK manufacturing companies are examined. • The implications of inadequate costings, lack of measurement of service levels and underestimation of the people and cultural aspects are discussed. • The significance of outsourcing for the practitioner role and concomitant skills is considered. • A five-stage framework to guide practitioner action is proposed. © 1997 John Wiley & Sons, Ltd.