Yesterday, we looked at some facts and fictions about outsourcing. Today, a look at the types of functions that tend to be outsourced — and an introduction to a webinar tomorrow you won’t want to miss.
What Do People Outsource?
The payroll example illustrates a clear trend: Outsourced functions tend to be “low touch” activities that are easy to automate for an organization with the right facilities to do it.
Deveri Ray of Washington Mutual (now Chase), speaking at a recent HR Week in New York conference, says the company lets vendors handle employment verification, health and welfare benefits, relocation, W-2 issuance, transit subsidy, and unemployment cost management.
HR outsourcing: What works and what doesn’t.
None of these are part of the bank’s core business, Ray noted, and there is a high cost to maintaining systems that do these tasks that would be hard to justify.
What she didn’t say – but clearly implied – is that outsourcing these functions allows the company’s HR efforts to concentrate on activities that leverage the talents of people to positively impact the company’s future. In this way, HR makes a greater strategic contribution.
The Principal Benefit Is Not Cost Reduction
The conference speakers were united in another theme: HR outsourcing can (and should) lower costs, but, in fact, its principal benefits are:
- Lowering the risks of noncompliance, and
- Increasing employee satisfaction by offering complete solutions otherwise not available.
HR Outsourcing and Offshoring: How to Manage the Legal, Operational, and Ethical Issues of Third-Party HR— webinar tomorrow!
These benefits are obvious when pointed out, but we suspect that most people—especially those outside of HR—still approach outsourcing with the idea that it will save money. While this is a valid objective, if it just saves money, or worse, if it does so to the detriment of employee satisfaction and morale, it is probably not moving the organization ahead enough to justify the savings.
HR Outsourcing and Offshoring: How to Manage the Legal, Operational, and Ethical Issues of Third-Party HR
HR outsourcing — hiring outside parties to do everything from background checks and employee counseling to payroll administration and recruiting — is here to stay. National surveys say a third of America’s HR professionals will outsource more work in the next few years, and they’re happy with what they’ve outsourced already. Plus, there’s a growing push for HR offshoring (sending HR tasks to vendors in other countries).
What’s driving these trends in many organizations? The need to reduce HR operating expenses. But, there’s a backlash brewing — with many employers resisting the urge to outsource HR because they want to maintain personal contact with their employees, they don’t want to lose control of their HR functions, and they fear damage to their cultures in the process.
Learn what works — and what doesn’t — these days with HR outsourcing and offshoring during this 90-minute webinar tomorrow, as our expert speaker (a longtime HR consultant who’s advised many clients in outsourcing decisions) explores these topics:
- The most common HR functions that employers routinely outsource nowadays — plus, what tasks will be outsourced more often in the future, and which duties you should never assign to third parties
- What initial steps you should take before you make any HR outsourcing decisions, from conducting internal process reviews to securing the green light from your top managers and C-suite executives
- How to identify, approach, and evaluate potential HR vendors
- What you must cover in any service level agreements (SLAs), from the contract’s scope and duration to your right to approve subcontractors, confidentiality provisions, and termination clauses
- Best practices for managing your HR outsourcing relationships and gauging the returns
- How to deal with the ethical considerations (e.g., offshoring HR tasks to vendors in countries where HR wages are much lower than U.S. levels)
Can’t make it tomorrow? Order the CD and learn at your leisure.