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To Outsource or Not to Outsource



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You have an in-house human resources director, but you don’t know if or how you can approach the subject of outsourcing. It does not have to be a situation where they feel you are replacing them, you're simply outsourcing tasks that will enable them to be stronger in their role. You’re also enabling your company to offer even more to your employees. According to a recent Society of Human Resources Management (SHRM) survey, companies outsource for many different reasons:

  • 26% of companies outsource to save money. 
  • 23% of companies outsource to focus on strategy. Spreading yourself too thin with all of the administrative tasks doesn’t leave a lot of time for planning.
  • 22% of companies outsource to improve compliance. It is increasingly challenging to stay in compliance and increasingly risky to not meet requirements.
  • 18% of companies outsource to improve accuracy. If you’ve got too much on your plate, accuracy may fall by the wayside.
  • 18% of companies outsource due to a lack of experience in-house. Knowing your weaknesses is as important as knowing your strengths, so handing off a task you know you can’t handle properly to someone with expertise is a great business decision.
  • 18% of companies outsource to take advantage of technological advances. With big data worth tapping into, but costly technology needed to really delve into strategic analytics, outsourcing can offer solutions without a significant investment.

So what HR functions are companies choosing to outsource? The SHRM survey shows:

  1. 84% outsource 401(k) administration
  2. 84% outsource employee assistance/counseling
  3. 74% outsource retirement planning
  4. 73% outsource pension administration
  5. 72% outsource temporary staffing
  6. 68% outsource background checks
  7. 57% outsource training/management development programs
  8. 54% outsource executive development/coaching
  9. 53% outsource employee benefit administration
  10. 49% outsource payroll


Posted in: HRO, Human Resources