HR Turns To Outsourcing To Save Money/Focus On Strategy

More than half (53%) of the HR professionals polled by the Society of Human Resource Management (SHRM) indicated their organization was doing some type of outsourcing, with saving money (26%) and focusing on strategy as the primary reasons (23%). Other reasons indicated include:

• 22% – improve compliance
• 18% – improve accuracy
• 18% – lack experience in house
• 18% – take advantage of technological advances
• 17% – offer services that otherwise could not be offered
• 15% – focus on the core business
• 5% – other.

Examining what function HR professionals are turning to for their outsourcing needs revealed a dead heat between 401(k) administration and employee assistance/counseling, both being outsourced by 84% of the outsourcing respondents. Also being outsourced by more than seven out of 10 of respondents was retirement planning help (74%), pension administration (73%) and temporary staffing (72%).

More than half of the outsourcing contingent also indicated outsourcing background checks (68%), training and management development programs (57%), executive development and coaching (54%) and health care benefits administration (53%). Further, nearly half (49%) have turned to outside vendors for employee benefit and administration and payroll.

Rounding out the list of outsourced services was:

• 46%- risk management
• 44%- executive staffing
• 41%- employee relocation
• 40 %- HRIS selection, training implementation
• 32%- recruitment
• 17%- executive compensation and incentive plans
• 15%- policy writing
• 14%- administration of compensation/incentive plans
• 11%- wage and salary administration.

The “Reasons for Outsourcing” survey was fielded during the week of July 22-29, 2003, and was based on the responses of 393 randomly selected human resource professionals. The “Functions Outsourced” survey was fielded during the week of July 29-August 5, 2003, and was based on the responses of 360 randomly selected human resource professionals.