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Outsourcing HR allows more focus on business functions
July 8, 2004
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Alexandria, Va. -- Seventy-five percent of human resource (HR) professionals agree that they are able to focus on core business functions when some HR responsibilities are outsourced. In addition, more than half of HR professionals report outsourcing some HR functions helps save money and control legal risks, according to the 2004 Society for Human Resource Management (SHRM) Human Resource Outsourcing Survey.

The survey reports findings from a random sample of 298 HR professionals from SHRM's membership. The survey asks respondents to report which functions their organizations outsource and what effect outsourcing has on their organization and the HR profession.

The most commonly, completely or partially outsourced functions are background checks (73 percent), employee assistance/counseling (66 percent), and flexible spending account administration (67 percent). The functions least likely to be outsourced are strategic business planning (4 percent), policy development or implementation (4 percent), performance management (3 percent), and employee communication plans (10 percent).

"Successful organizations utilize the strengths of all employees," says Susan R. Meisinger, SPHR, President and CEO of SHRM. "Outsourcing some administrative HR responsibilities allows HR professionals to focus their time on strategic HR and exercise their strengths as business leaders in the organization."

In addition to cost savings and improved compliance, more than 40 percent of respondents indicated other reasons for outsourcing, including gaining access to vendor talent, streamlining HR functions, offering services the organization could not otherwise provide, and allowing the company to focus on its core business function.

Although HR professionals reported benefits from outsourcing, they also reported the major obstacles they faced in the decision to outsource HR functions. The largest obstacles were fears that customer service to employees might be affected (64 percent), fears about loss of control (51 percent), and concerns that outsourcing might impact company culture (33 percent).

 
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