30 October 2008:
But small startups aren’t the only ones benefiting from HR outsourcing arrangements. Large enterprises also have something to gain from turning to providers such as ExcellerateHRO Corp., Accenture, Hewitt Associates LLC and Ceridian Corp. “HR outsourcing makes complete sense for a large organization,” said Jennifer Perrier-Knox, a senior research analyst at Info-Tech Research Group. Here are some reasons why:
Keeping tabs on a large enterprise’s HR functions, from recruiting fresh talent to overseeing payroll, is a burdensome and time-consuming activity. However, by handing over these activities to a third-party provider, a company’s in-house HR team can shift its focus from mundane administrative tasks to “competitive differentiators,” according to Perrier-Knox. Policy enforcement, strategic planning, human capital management, increased productivity and organizational restructuring are business-critical undertakings far more likely to improve a company’s bottom line and increase employee satisfaction.
While small companies often lack the in-house expertise needed to manage HR functions effectively, that’s simply not the case for large enterprises. Rather, HRoutsourcing’s main attraction for large corporations is its ability to cut costs. Said Perrier-Knox, “Where large companies can really benefit from HR outsourcing is in the area of cost reduction.”
According to a recent Watson Wyatt Worldwide report, the average operating expense for HR functions for each full-time HR employee is $284,982. Granted, an HR outsourcing arrangement can cost anywhere from $200,000 to millions of dollars. But when you factor in costs associated with the ongoing training and recruitment of in-house HR personnel, many corporations are better off financially going with an HR outsourcing provider.
Source: HR World