New research from Ceridian questions who is really in the driving seat for HR Outsourcing

14 April 2009

New research from Ceridian reveals that a third of HR decision makers are against outsourcing, while those who may not be fully leveraging the economic benefits.

New research from Ceridian, one of the largest providers of human resources services in the world, reveals that, despite the credit crunch, nearly one third of HR decision makers are totally opposed to any or further outsourcing in their organisations.  Unsurprisingly, only 20% of HR professionals consider the HR director as a key decision maker in HR outsourcing decisions with nearly a third citing other senior management including the finance director.

Expertise and cost may get you through the door but it is value derived through service performance that keeps you in the building David O'Connor

The survey of 250 HR decision makers revealed that whilst a hardened minority did not see outsourcing as an issue or priority there were close to one third who supported outsourcing providing it clearly delivered better value for money than providing the same services in house.

However, where they did outsource, organisations were clearly not fully leveraging the economic benefits.  Six out of ten outsourced only one process in spite of the prevalence of multiple HR outsourcing services which offer ‘joined up’ cost savings and efficiencies. 

“The credit crunch has left no business function untouched. Costs across businesses are being scrutinized and the HR department is no exception. It is no surprise that outsourcing services are being considered and to some extent that this consideration is taking place outside the remit of HR. The economic climate is highlighting a divide between the HR decision makers who are prepared to use outsourcing as a means to leverage value and gain immediate returns for their organisation against those who take a more parochial perspective.” says David O’Connor, Ceridian’s Marketing and Commercial Services Director.

“In a time when we are seeing reduction in headcount on a grand scale in a lot of businesses, the importance of HR is not in question. It’s more simply that their time and skills are used to add the most value to the business. Outsourcing offers demonstrable return on investment, insight through comprehensive reporting and the kind of flexibility that can help businesses survive but in our survey over 66% of businesses are failing to capitalise on the significant returns available”

Buying in expertise not already in the business (40%) and cost (33%) were cited as key drivers for outsourcing but HR professionals value service related issues such as accuracy (71%) and reliability (68%) over price (50%) when evaluating the quality of the outsource provider.

“Expertise and cost may get you through the door but it is value derived through service performance that keeps you in the building “ says David O’Connor.

The survey findings are included in “HRO and the Credit Crunch” a report examining the impact of the global financial crisis on the human resources outsourcing market over the next two years.  Additionally the report provides crucial insight into the decision making factors HR professionals use when outsourcing.

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