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HR Off-shoring / Outsourcing: A Buyer's Market
from: John Parker Finding a sting in rising healthcare costs, many large
corporations are signing up for a reprieve by letting
off-shoring / outsourcing providers handle it all, right from
benefits to recruiting and all. Although, benefits
administration off-shoring / outsourcing has been taking place
for more than a decade, today's vendors aim to perform the
entire functions of a HR department. Previously, off-shorers /
outsourcers had the knowledge and expertise pertaining to one
area of HR only i.e. contribution administration, and knew zilch
about HR information systems or vice versa. Today, success that
has come from off-shoring / outsourcing has led specialised
vendors to merge in a bid to create a one-stop shop for global
employers. Now, companies looking to run a particular department
at half cost are smoothly able to unload the entire work to an
offshore / outsourcing vendor without tying up the works.
And, as the off-shoring / outsourcing market matures, costs
across all segments have experienced a sharp decline, as much as
20% in the last four to five years. Overheads for buyers with
more than 25,000 employees seem to be coming down faster than
for those with a workforce less than 25,000. That, is not to say
small-time employers will not reap the benefits of off-shoring /
outsourcing, its influence will definitely accelerate in the
future as the off-shoring / outsourcing market continues to
mature.
With HR service buyers reaping the cost reduction benefits of
off-shoring / outsourcing compound functions, many more HR
processes are being off-shored / outsourced to vendors, as a
direct result. Certainly, one-stop stopping seems to be hitting
the mark, and February 2005 saw British Telecom sign a 10-year
contract renewal deal with Accenture for providing recruitment,
benefits and pension administration, performance management and
payroll administration services. BT was not the only one to
offshore / outsource its entire HR administration; it kept good
company with Marriott International Inc. and Delta Air Lines
Inc. who joined it in off-shoring / outsourcing their entire HR
business.
Off-shoring / outsourcing HR functions by companies is gaining
momentum, not only because it helps control healthcare costs, it
also leaves just one throat to choke, i.e. the vendor's if HR
processes don't function smoothly, and one back to pat if things
go as planned. As HR off-shoring / outsourcing speeds up, the
only people to be left in HR departments of numerous companies
will be the people responsible for strategic planning.
Offshore / Outsource for increased benefits!
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