Issue link: http://www.e-digitaleditions.com/i/94708
Institutional Knowledge State of By Elizabeth Boudrie We recently launched a short-answer research project asking HR practitioners and providers of HR outsourced services a few questions about the state of HR outsourcing, including questions about where the HR outsourcing industry is now, what works and doesn't, and where it's headed. As you'd expect, we found both similarities and differences in their responses. What we found most interesting, though, is the often different approaches the two groups took to answering the questions. Here's what we heard. Thriving, Surviving, or Dying On the whole providers are more sanguine about the "health" of HR outsourcing than are practitioners, with 50 per cent of providers saying HR outsourcing is thriving versus 25 per cent of practitioners. Among practitioners who say that HR outsourcing is thriving, the three most commonly cited reasons were: • Regulatory compliance. Practitioners need the assistance of external experts to deal with the ever-increasing complexity and burden of regulatory compliance. • Cost containment. Cost structures make it easier to manage expense externally. • Specialisation. Provider specialisation enables them to identify and employ best practices that practitioners may not be able to match. Providers who say HR outsourcing is thriving cite similar issues— buyer need for expertise and specialisation, and the need for assistance with cost management. However, no provider mentioned the most commonly cited reason practitioners cited—the increasing burden of regulatory compliance—as a reason for continued market growth. Clearly this is a hot-button issue for practitioners around which providers may want to raise their profiles. I believe HR outsourcing is... 3% 8% Practitioners 25% 50% 50% The Industry Providers 64% Thriving Surviving Dying No idea Practitioners and providers who said HR outsourcing is surviving (continuing to exist, but not growing at any real pace) generally had similar reasons for that response. HR outsourcing doesn't "go away" for at least two reasons: • Valuable service. On the whole, providers have changed to meet practitioners' needs, enabling them to survive (the most commonly cited example here was the move to point solutions from enterprise HRO). The provider-practitioner disconnect has widened—and narrowed— depending on the question. [28] HRO TODAY GLOBAL | FALL 2012