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What Is Human Resources Outsourcing Doing for You?
Featured Author:
Scott McArthur
Scott McArthur is a Management Consultant (Atos Consulting), public speaker and writer on HR and people development. He has delivered learning events and speaking engagements in Europe, Australia, Hong Kong, Canada, China and the USA.
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October 24, 2008
It appears that Human Resources Outsourcing (HRO) is finally delivering on its initial promises. This is potentially good news for organizations embarking on HR Transformation which has, to date, often failed to live up to ambitious claims of process improvements and cost savings.
In a recent survey by IT research and advisory company Gartner, (reported in the Times), asking whether outsourcing HR functions to specialist providers had saved them money, 78% of respondents said they had saved at least 10% by outsourcing in 2007. In 2006, only 32% of firms reported similar savings. The rise suggests that organizations and providers (both private and government organizations are quoted in the research) are learning from the mistakes some made when HRO was still a new approach.
So what are the reasons for this apparent improvement? The research suggests that chances of success are improved where organizations go down the HRO route for reasons not limited to cost reduction. The choice of and relationship with an external partner is key to HRO’s success. Centers of excellence specifically in the areas of regulation and employment law also appear to be driving cost out of organizations by providing effective specialist legal skills.
Technology also has a role with remote networking technologies playing an important role in cutting down lead times and the option of “renting” technology becoming an increasingly important alternative to expensive in-house IT provision.
This is good news for HR professionals looking to increase their influence on their organizations and represents a welcome change from all the HR bashing that goes on out there.
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seabrownthree
29 days ago
3028 comments
Outsourcing has been around for a number of years, and is growing in serious acceptance. It's been a tried and true method of gaining the most benefit out of the smallest amount of expenditure. I know a company that wastes thousands upon thousands of dollars every year keeping an employee who has so much down time throughout the year that he almost isn't working. But they keep him on a salary with fantastic benefits, just in case they should need him from time to time. Outsourcing that position would save them an unbelievable amount of money, and in a time when companies are feeling the crunch, this is the way to do it. It doesn't diminish the quality of the work, and it balances out the needs of the company and the needs of the consultant.