Survey: Outsourcing Extends To HR Function

Compiled By Jill Jusko Human resources functions increasingly are being outsourced by the world's largest companies, shows the results of a new survey. The three primary factors driving this move are efforts to reduce costs, improve service to employees and maximize resources across organizations, revealed the survey. "Outsourcing is now a fact of life in well-managed human resources organizations, and we do not see companies pulling back," says David Dell, a research director with the New York-based Conference Board, the business research organization that conducted the study. The survey results were released by consulting firm Accenture. According to the study, the three HR areas most frequently outsourced are 401(k) programs, health benefits management and pension benefits. Employee communications was the area least likely to be outsourced. Other key survey findings include:

  • Two-thirds of U.S. companies outsource, either partially or fully, five or more functions, making them much more likely to outsource than their counterparts in Europe.
  • Less than 1% of previously outsourced functions have been brought back in-house.
  • Seventy-eight percent of the survey participants are moving to a shared-services HR model. Research for this study was conducted over a six-month period. Executives from 125 companies across a variety of industries completed written questionnaires, while 40 others were interviewed by telephone.
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