HR Outsourcing Brings Cost Savings, Satisfaction

April 20, 2005 ( - The latest examination of the cost savings from human resource outsourcing asserted that there is a high satisfaction rate with both quality and savings.

PricewaterhouseCoopers has released a statement reporting that of the nation’s fastest-growing companies, 83% outsource at least some HR functions and 61% are seeing cost savings. Overall, the report states that 81% of CEOs polled say their experience with outsourcing has met or exceeded expectations, while only 15% reported a “mixed” experience. Ninety-four percent are satisfied with quality levels and 87% are satisfied with cost-savings, which average 16.7%, according to the news release.

Seventy-four percent of those polled said that their HR outsourcing budget has held steady for the past two years, while 4% said that it has decreased. Going forward, 62% expect no change in this budget, while 3% expect it to decrease.

There are a wide array of reasons to outsource, according to the poll. At these companies, 82% cited compliance with complicated federal and state regulations as a reason to outsource, while 71% cited the need to reduce and control operating costs. Other reasons were eliminating costs of in-house systems (71%), improving process inefficiencies (70%), and eliminate difficult-to-manage functions (67%).

The most often outsourced HR functions of those in the poll were 401(k)/DC plan administration (71%) and payroll processing (64%).

The report stands in contrast to another released Tuesday that stated that many firms are repatriating outsourced function because of lack of costs savings and dissatisfaction (See Many Companies Repatriating Outsourced Functions ).

PricewaterhouseCoopers’ “Trendsetter Barometer” is compiled with the help of BSI Global Research.