Companies are continuing to selectively outsource HR technology and functions rather than relying on one provider, a Watson Wyatt study finds.
Selective outsourcing has continued to grow over the past few years, and given current economic conditions, that trend is expected to continue, according to the global consulting firm. And based on the survey of 182 U.S. companies, many say expect to do more outsourcing in areas such as health and welfare programs.
CedarCrestone, a technology research firm based in Alpharetta, Ga., also found in its 2007/2008 HR Systems Survey that selective outsourcing is preferred to total business process outsourcing in most HR categories. The study also predicts that selective outsourcing will continue to expand in 2008, especially as small- and medium-sized companies begin to utilize the strategy.
Based on the Watson Wyatt study, the following HR functions that are now or likely to be outsourced in the near future include:
- Defined contribution retirement administration: 75 percent (now); 1 percent (future).
- Health and welfare: 52 percent (now); 6 percent (future).
- Defined benefit retirement administration: 50 percent (now); 5 percent (future).
- Stock administration: 40 percent (now); 6 percent (future).
- Deferred compensation: 36 percent (now); 3 percent (future).
- Payroll: 22 percent (now); 8 percent (future).
- Recruiting: 9 percent (now); 6 percent (future).
- Performance management: 4 percent (now); 5 percent (future).
Despite these findings, however, few companies (21 percent) automatically look to outsource functions. The majority (63 percent) look internally for HR delivery solutions.
To read more about the survey, click here.
Written by Jenny Cromie, certified human resources specialist (CHRS)
E-Mail Story
Print Story
