HR outsourcing moves onto boardroom radar

HR outsourcing is moving up the boardroom agenda, according to research.

A survey of more than 350 employers by global HR consultancy Hewitt Associates reveals that a fifth of respondents (20.9%) said outsourcing is currently a priority for their organisation, and more than one-third (34.7%) expect it to be a priority within two years.

However, organisations’ adoption of outsourcing may be hampered by a need for educating HR professionals.

Just one-third (32.8%) of HR professionals admitted to being unclear on many or all areas of HR outsourcing, with a further one-third (34.5%) unsure about the functions that they do not already outsource.

Chris Noon, outsourcing consultant at Hewitt, said: “The trend towards HR outsourcing is accelerating as organisations increasingly embrace the innovative technological solutions, improved efficiencies and cost savings that outsourcing represents – but many HR practitioners may be struggling to keep fully abreast of developments.”

HR practitioners also revealed in the survey that while they are happy to outsource administrative functions, they are keen to retain control of strategy and value-adding functions such as professional development.

Almost half of respondents currently outsource pensions administration (44%) and payroll functions (40.5%), and almost a fifth outsource learning and development (19.3%).

This compares with just 2.3% who outsource more strategic functions such as succession planning and 3.4% who outsource performance management. More than one-third (35.1%) believe that certain functions should not be outsourced, with strategy top of the list.

An increasing emphasis on quality also emerged in the survey: 21.8% of respondents placed quality as more important than cost for outsourcing.

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