Survey: HRO Buyers Wish for Strategy First

August 5, 2003 ( - Executives who buy HR outsourcing services say they would put a formal outsourcing strategy in place before contracting with a vendor if they could redo their current outsourcing efforts, a study found.

According to the report, Unveiling the Secrets of Human Resources (HR) Outsourcing Decision Making: Lessons from the Trenches, building a strategy beforehand would help make sure that enough time, resources, energy and knowledge are devoted to its success. Conducting the research was Ross Research, an outsourcing research and consulting firm, along with HRO Today magazine and Mellon HR Solutions and involved 80 current HR outsourcing buyers.

Other study results included:

  • The two most important factors influencing an HR outsourcing buying decision are increased service levels and access to better technology and systems.
  • The three most commonly outsourced HR business processes are: pension/401(k)/defined contribution benefits administration, health benefits administration and payroll. Others include: relocation, online job listings, HRIS/employee self-service, employee service/call centers, staffing/recruiting, training and incentive management.
  • The number one concern voiced by those who had already outsourced HR functions is getting false promises by the vendor, followed by high or hidden costs, as indicated by one third (33%) of study participant.

The research was conducted via a Web-based survey in June and July 2003. For more information, go to .