Mid-sized companies will not outsource HR

Few mid-sized companies have outsourced their HR functions, according to the latest quarterly research from professional services consultancy KPMG.

The survey of 100 companies with a turnover of between £5m and £500m revealed that only 8% had outsourced HR.

The most popular functions to be outsourced were training, IT and payroll, all farmed out by 28% of companies, while 40% said that they had not outsourced any of their business functions.

Only 2% said they were considering or might consider outsourcing the HR function in the future.

Four percent said they might consider outsourcing the payroll function, compared to 6% for the finance function. However, 76% said they had no wish to outsource any business functions at all.

Paul Diamond, director at KPMG said: “For mid-sized firms, the decision to outsource their HR function may not be top of the priority list. Often it won’t be a straightforward decision, nor will it be suitable for all businesses.

“We recommend that a strategic audit of the HR department is undertaken at the outset of the process to identify the areas where gaps exist and to identify some of the solutions required to help fill them.  Sometimes outsourcing HR may simply not fit the bill for companies of this size.”

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