Hewitt: HR Outsourcers Still on board with Process

December 6, 2006 (PLANSPONSOR.com) - Seven in 10 employers in a recent survey said their companies have already realized the benefits they had hoped to gain from HR outsourcing and 65% are satisfied or very satisfied with the result.

A news release from HR outsourcer and consultant Hewitt Associates about its recent HR outsourcing survey said respondents considered outsourcing primarily to improve service quality (74% ranked it four or higher on a one-to-six scale). Six out of 10 gave a four ranking or higher to:

  • getting more access to outside expertise.
  • saving money, and
  • saving HR resources to focus on their core business goals.

But the HR outsourcing picture isn’t entirely bright. Nearly two-thirds of respondents say they face internal barriers to HR outsourcing, with the top three being concerns about losing control of key processes, concerns about employee reactions to an external service provider and difficulty building a business case.

Other survey findings include

  • The majority of respondents (78%) prefer an HR outsourcing provider with in-depth HR consulting expertise versus a broad outsourcing provider that can provide services to multiple parts of the organization.
  • Forty-four percent of respondents indicated that cost savings was not one of the primary objectives they hoped to gain by outsourcing. Among those for whom cost savings was a primary objective, nearly three-quarters (73%) said they had achieved their objectives.
  • The majority of survey respondents include service level agreements in their HR outsourcing contracts. Data delivery and transaction accuracy are the most common standards included in agreements, each cited by more than two-thirds of companies.
  • The CEO is the final decisionmaker when considering HR outsourcing, cited by more than half (52%).

The survey covered nearly 100 large US companies representing two million employees.