HR Outsourcing Still a Significant Trend

April 4, 2006 ( - The Genesys Human Capital Management (HCM) trends survey for 2006 shows that companies continue to outsource human resource functions.

Survey respondents listed the following major priorities for 2006, according to a press release:

  • Talent and leadership development combined with talent acquisition and retention – 45%,
  • Performance management – 21%,
  • Streamlining processes – 18%, and
  • Aligning people and business goals – 18%.

Additionally, 38% of respondents indicated that budget expectations over the next 12 months for HR technology and outsourced solutions would increase, by as much as 9% in some cases, the release said.

Reasons respondents outsourced HR functions included:

  • Streamline operations – 40%,
  • Access to world-class capabilities and industry expertise combined – 40%,
  • Free-up internal staff – 32%,
  • Reduce labor costs – 25%, and
  • Accurate and predictable monthly costs – 21%.

The most commonly outsourced function was payroll processing (32%), followed by employee assistance programs (29%), payroll tax filing (25%), and background screening (24%).

Price was the key factor in vendor selection chosen by respondents. Other important factors included breadth and depth of product line, financial stability, and references/reputation.

Forty-three percent of respondents said adopting employee/manager self-service was not a priority, though respondents listed employee ownership of general data, online open enrollment, reduction of calls placed to HR and overall cost savings as benefits of self-service.

The Genesys HCM trends survey can be requested here .