Outsourcing in the human resources department

Companies of all sizes and industries are outsourcing parts of their Human Resources (HR) business processes to operate more efficiently and to better serve their customers. In collaboration with the SBPOA, we interviewed current and existing buyers of outsourcing services to discover what they need, want and expect from business process outsourcing (BPO).

We discovered that:

* The most commonly outsourced business process today by companies around the world is HR.
* HR will continue to be one of the most widely outsourced business processes over the next few years.
* HR outsourcing, already very popular in the United States, continues to be so, but slightly more non-US firms anticipate outsourcing that process.

From a different research study we recently learned that the most commonly outsourced HR business processes include: Pension/401(k)/Defined Contribution Benefits Administration, Health Benefits Administration and Payroll. Other popular outsourced services include, among others: Relocation, Online Job Listings, HRIS/Employee Self Service, Employee Service/Call Centers, Staffing/Recruiting, Training and Incentive Management.

That same study showed that the two most important factors driving companies to HR BPO are: increased service levels and access to better technology and systems. Another major influencing factor is cost savings or cost control.

Analyst firms that track this industry, including Ross Research, predict strong and healthy growth. As companies continue to seek efficiencies and drive costs out of their organizations, the HR function will be among the most obvious areas to gain advantages via outsourcing.