Research Finds Nearly $16M in Savings from Offshoring HR Functions

December 28, 2006 ( - Research by The Hackett Group found offshoring of back-office functions could generate $58 billion in annual savings for Fortune 500 companies - $15.6 billion of which can be generated from offshoring certain human resources operations.

According to a Hackett press release, advances in technology, along with increasingly educated global workforces, enable the portability of business support activities across information technology, finance, human resources, and procurement functions. Human resources functions offering the largest potential return on investment from offshoring are data management reporting & compliance, total rewards administration and payroll administration, Hackett said.

The firm estimated the increased use of offshore resources could impact around 3,000 general and administrative jobs per Fortune 500 company – 390 of which are in HR.

The education base and skill sets available in India, China, The Philippines, Pakistan, Eastern Europe, Brazil, and other countries continues to expand, according to Hackett. “Today, companies can turn to established offshore resources that deliver labor cost reductions while maintaining or even improving the skill level of staff,” said Hackett Managing Director Michel Janssen, in the news release.

Hackett’s analysis draws form ongoing benchmark studies that have captured outsourcing costs since 1992. Full research details can be viewed at . A free registration is required.