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You Should Consider Human Resources Outsourcing

Organizations tend to apply simple rules about employing business process outsourcing:

  • Outsource non-core activities
  • Offering best practice processes to niche providers
  • Achieve higher cost savings
  • Improve management’s focus on more strategic issues

Some executives use BPO to achieve a more diverse set of objectives, including driving consistent management practices through global operations, starting new operations quickly, maintaining flexibility with non-core business units, and affecting rapid organizational change.

When considering HR BPO, executives should evaluate a number of factors that could drive a decision to outsource human resources administrative functions. Typically, some of the following conditions are present in organizations considering Human Resources Business Process Outsourcing:

Company Budget Issues
• Must reduce HR overhead cost
• Must control HR cost within the annual budget
• Need predictable HR costs even as workforce size fluctuates
• Want to avoid onerous upfront HR Technology expense
• Disconnected payroll and benefits systems, resulting in excessive benefits costs		 HR Service Bureau Customer
• Currently outsourcing one or more HR functions
• Using multiple service bureaus
• Frustrated with poor service
• Wrestling with hidden, increasing fees
• Unhappy with unpredictable costs and budget overruns
• Outgrowing current PEO solution
HR System Decision Point
• Outgrown current system capabilities
• Failed HRIS project
• Evaluating new software investment
• Facing costly software upgrade
• Need rapid deployment alternative
• Require lower cost alternative
• Need Web-accessible solution
• Require simple data exchange with financial systems		 Company Profile
• More than 500 employees
• Distributed workforce with computer access
• Growing or declining workforce
• Acquiring or divesting operating units
• Have already outsourced other business functions
• Executive team willing to consider outsourcing alternatives
IT Budget Objectives
• Prefer to invest IT budget, people and systems to support core business
• Want to avoid or limit capital investment in non-core business systems
• Need lower cost solution for providing HRIS capabilities
• Want to reduce percentage of IT budget dedicated to an HRIS		 Human Resources Strategy
• Focus HR staff on strategic issues, not transaction administration
• Cut administrative cost per employee
• Need access to HR experts without carrying people and cost
• Enhance focus on people achieving the company’s business objectives
• Incur high transaction cost and volume due to high turnover or low payroll cost per employee
 
     
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Last updated: 05/31/2007   © 2007 PlatformOne, All Rights Reserved.