Benefits June 14, 2006

Survey: HRO Success for Retained Staff Hinges on Proper Planning

June 14, 2006 (PLANSPONSOR.com) - A survey found that after a company outsources most of its human resources functions, the HR employees that they retain become more involved in consultative and decision support for employees.
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The survey – called “Retained HR After Outsourcing: Optimizing Performance” – by Affiliated Computer Services’ subsidiary, Buck Consultants also found that companies who had the greatest success with outsourcing have planned ahead by investing in training retained staff and bracing for management shifts.

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Those high-performing organizations reporting significant increases in customer satisfaction and productivity improvements in HR service delivery, as a result of HRO, planned ahead 48% more often than other respondents for the new roles of retained HR staff.

Other results of the survey include:

  • 54% of respondents considered the future role of retained HR staff in their outsourcing strategy, and 13% waited until outsourcing was implemented before considering retained HR staffing issues.
  • More than one-half of all respondents provided retained HR staff with consultative skills training, while 50% also provided business skills training. High performers were 39% more likely to have engaged in training efforts.

The survey also tried to gauge future HRO trends and possible future changes to the industry.

Thirty-eight percent of respondents currently outsource a significant part of their HR functions, and another 21% plan to outsource or are seriously considering HRO. The survey also found that among the companies that most often look to outsourcing their HR functions, 28% say the reason for doing so is to save money and 24% cite some other strategic reason.

“As HRO services mature and successes are more widespread, organizations that currently outsource are willing to expand the scope of HRO,” said Bruce Barge, Managing Director of Buck’s HR Management practice, in a release. The survey found that 60% of respondents who have outsourced for three or more years outsource between three and seven HR functions.

The survey also found that respondents predict significant changes in their HR operations in the next few years:

  • 88% will increase their use of technology to deliver transactional support
  • 72% will increase strategic HR support
  • 59% will increase global alignment of HR systems and processes
  • 58% will increase consultative services to line managers
  • 57% will increase decision support.

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