Top HR Trends. HR Outsourcing Experience Changing HR Expectations

Consistent with trends seen in recent years, HR departments continue to outsource anncreasing number of services to accommodate legal and compliance expectations, and they are changing their expectations of these service providers based on their experience.

The continued use of service providers have taught HR professionals that cost can nolonger be the primary motivation when choosing a provider. According to a recent survey by Towers Perrin, HR departments often experience less than a 40 percent satisfaction level with their service provider. This increasing dissatisfaction has led some HR departments to bring services back in house after outsourcing, confident that they will receive better service from their own people. However, most HR providers continue to outsource, but they change from quantitative metrics such as price to qualitative metrics when choosing a provider.

After receiving unsatisfactory service from even one provider, HR departments are more cautious when choosing another. Even though many HR departments have no choice but to outsource several business processes, they more heavily scrutinize their prospective providers, looking for differentiators such as quality of service and integration. This shift in perspective is affecting the way HR professionals approach potential service providers and has created new best practices for outsourcing HR services.

Industry leaders realize that outsourcing can provide cost savings and a competitive advantage because it allows them to focus on their core competency; in order to do this, service providers must prove more than just cost efficiency. Customer service is tantamount for successful outsourcing, and this differentiator is what many HR departments seek when choosing a new provider. This way, HR professionals ensure that they are building a partnership which will help them provide better service to their internal customer. However, HR professionals must know what they are looking for and be cognizant of their needs and expectations before even entering the evaluation period in order to realize the potential benefits of outsourced service providers.