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Outsourcing: A Strategic Solution

Outsourcing: Why and What

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Background Checks Are a Viable HR Outsourcing Option

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Looking for ways to potentially cut costs and unburden your shrinking Human Resources staff members? Do you have staff working until six and seven at night? Are you going home each day feeling as if you will never catch up? If so, join the crowd - or choose not to join. Outsource instead.

"The current economic climate is forcing organizations to explore tactics to remain competitive. Business process outsourcing of certain functions is an increasingly popular way to improve basic services while allowing HR professionals time to play a more strategic role in their organizations."

In a recent survey by the Society for Human Resource Management (SHRM), HR professionals were asked if they outsource any HR functions. Additionally, if they do outsource, they were asked what functions they outsource. HR professionals were asked to select all that apply.

"Reason for Outsourcing

  • 26 percent – Save money
  • 23 percent – Focus on strategy
  • 22 percent – Improve compliance
  • 18 percent – Improve accuracy
  • 18 percent – Lack experience in house
  • 18 percent – Take advantage of technological advances
  • 17 percent – Offer services we otherwise could not
  • 15 percent – Focus on core business
  • 5 percent – Other
  • 47 percent – Do not outsource[/li[

Functions Outsourced

  • 84 percent - 401 (k) administration
  • 84 percent – Employee assistance/counseling
  • 74 percent – Retirement planning help
  • 73 percent – Pension administration
  • 72 percent – Temporary staffing
  • 68 percent – Background checks
  • 57 percent – Training and management development programs
  • 54 percent – Executive development and coaching
  • 53 percent – Health care benefits administration
  • 49 percent – Employee benefit administration
  • 49 percent – Payroll
  • 46 percent – Risk management
  • 44 percent – Executive staffing
  • 41 percent – Employee relocation
  • 40 percent – HRIS selection, training implementation
  • 32 percent – Recruitment
  • 17 percent – Executive compensation and incentive plans
  • 15 percent – Policy writing
  • 14 percent – Administration of compensation/incentive plans
  • 11 percent - Wage and salary administration"

Take a look at what other organizations are outsourcing. Outsourcing certain business processes might make sense for you, too. In any case, thinking about it just makes good business sense from a strategic perspective.

(The Reasons for Outsourcing survey was fielded during the week of July 22-29, 2003, and was based on the responses of 393 randomly selected human resource professionals. The margin of error is +/- 4.9 percent.)

(The Functions Outsourced survey was fielded during the week of July 29-August 5, 2003, and was based on the responses to outsourcing questions of 360 randomly selected human resource professionals. The margin of error is +/- 5.15 percent.)

For additional information, and more about this topic, visit SHRM.

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