Benefits July 7, 2004

HR Outsourcing Can Clear Execs' Plates

July 7, 2004 (PLANSPONSOR.com) - Sending out at least some HR functions for outsourcing allows HR officials to better focus on important corporate strategic functions.
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Some three quarters of HR executives in a recent survey said such outsourcing gave them more time to concentrate on achieving company goals, according to the 2004 Society for Human Resource Management (SHRM) Human Resource Outsourcing Survey. In addition, more than half reported outsourcing some HR functions helps them save money and control legal risks.

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In addition to cost savings and improved compliance, four in 10 respondents indicated other reasons for outsourcing, including gaining access to vendor talent, streamlining HR functions, offering services the organization could not otherwise provide, and allowing the company to focus on its core business function.

According to the survey, the most oft-outsourced responsibilities include:

  • background checks (73%)
  • employee assistance/counseling (66%)
  • flexible spending account administration (67%).

At the other end of that spectrum, the functions least likely to be sent out are:

  • employee communication plans (10%).
  • strategic business planning (4%)
  • policy development or implementation (4%)
  • performance management (3%)

But all wasn’t sweetness and light in the outsourcing picture. HR professionals also reported facing major obstacles, the largest being:

  • fears that customer service to employees might be affected (64%)
  • fears about loss of control (51%)
  • concerns that outsourcing might impact company culture (33%).

“Successful organizations utilize the strengths of all employees,” said Susan Meisinger, president and CEO of SHRM. “Outsourcing some administrative HR responsibilities allows HR professionals to focus their time on strategic HR and exercise their strengths as business leaders in the organization.”

The survey reports findings from a random sample of 298 HR professionals from SHRM’s membership.

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