The Value of HR Outsourcing
As the HR Outsourcing industry has matured, the motivations for outsourcing have become clear. While cost savings were anticipated to be the key driver, one of the most cited reasons is the access to HR expertise and certified professionals. Nowhere else can a company gain such a depth of knowledge that can contribute to process improvements, risk mitigation etc. for such a minimal investment.
Other benefits provided by HR Outsourcing include:
- Reduce the time spent on HR administration.
- Gain the support of a team certified HR professionals.
- Offer quality employee benefit plans at affordable rates.
- Improve operational procedures and reduce employer liabilities.
- Integrate HR functions through state-of-the-art HRMS technology.
- Improve their focus on their core function or business.
- Reduce the total cost of labor and improve productivity.
Studies have proven the value in HR Outsourcing as well. Below are some examples of this success:
- Of the 360 fastest growing privately held product and service companies, over 60% of CEOs enjoy savings greater than 16% with HR Outsourcing 81% have indicated their expectations have either been met or exceeded. (Barometer Trendsetter Survey: Almost all Fast-Growth Companies Outsourcing HR functions, April 20, 2005)
- Self-service applications reduce HR costs by anywhere from 44% to 80%, depending on the application. (Source: Cedar eWorkplace Research Group)
| Average Annual Savings For US Businesses That Outsource HR Functions |
| 1 - 9 Employees: |
$5,000 |
| 10 - 19 Employees: |
$10,000 |
| 20 - 49 Employees: |
$18,700 |
| 50 - 99 Employees: |
$32,000 |
| 100+ Employees: |
$78,000 |
Source: National Assn. of Professional Employment
Organizations