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Aug 12, 2009
Author: Vendorseek.com
Human Resource Outsourcing Outlook 2009
In a recession, all arrows point to outsourcing. The Human Resources Outsourcing (HRO) industry projects growth at five percent in 2009 amid the most severe economic downturn since the Great Depression. Some of the industry changes driving this growth promise to translate into improved ROI for HRO clients. Find out which behind-the-scenes strategies will save you money in 2009.
To reach a projected $3.2 billion in sales, HRO intends to drive new business through several strategic initiatives.
A La Carte Service
Industry analysts are predicting more componentized deals, allowing companies to select specific services to outsource while retaining others in-house. HR outsourcing suppliers are building greater flexibility into service agreements, allowing clients on-demand service changes and pay-as-you-go pricing. With cost reduction a top priority, new clients will target transaction-intensive processes for outsourcing. Human resources outsourcing services include:
- Payroll and benefits
- Recruiting
- Performance management
- Compensation
- Learning
HRO clients can trim expenses by accessing available resources only as needed, scaling outsourced services to meet changing needs. In a volatile economy, this sort of flexibility is crucial to maintaining a lean business.
Human Resource Management System (HRMS) Technology
Human resource management system (HRMS) technology has hitherto served as something of a competitor to HRO. HRMS facilitates in-house human resources, providing a global view of human capital and automating tasks such as payroll, benefits, recruiting, training, and performance tracking. A technological solution can increase in-house efficiency, rendering outsourcing unnecessary.
In 2009, however, analysts predict an increased adoption of HR technology by outsourcing providers. By making this technology available to clients on a Software as a Service basis, HRO suppliers present an attractive proposition for companies looking to avoid a large capital outlay. Clients benefit from subscription-based access to both the state-of-the-art technology and the providers outsourced human resources team.
Consolidation in the HRO Industry
Consolidation among HRO suppliers will bring better value to clients outsourcing multiple processes or implementing a large-scope human resources solution. Industry analyst Everest Research Institute expects to see consolidation via mergers and acquisitions as well as via partnerships among independent suppliers. Providers will consolidate in order to broaden their expertise into new processes and technology; widen their geographical footprint; and expand their market share.
For HRO clients, consolidation promises greater efficiency and access to broader services, as well as a reduction in the cost of multi-process service contracts. Continuity between services alone produces greater value. For example, a global HRO supplier might partner with a specialized Recruitment Process Outsourcing (RPO) provider to deeper recruiting services in specific geographies. Their clients benefit from both the reach and economy of a global HRO and the local recruitment relationships of the partner.
The coming year offers a promising outlook for human resource outsourcing suppliers and clients alike. As the market for outsourcing human resources matures, the industry will drive growth by increasing the efficiency and breadth of its services. In a climate of pessimism and gloomy forecasts, companies finally have something to cheer about.
by VendorSeek.com
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Aug 12, 2009
Author: Vendorseek.com
Human Resource Outsourcing Outlook 2009
In a recession, all arrows point to outsourcing. The Human Resources Outsourcing (HRO) industry projects growth at five percent in 2009 amid the most severe economic downturn since the Great Depression. Some of the industry changes driving this growth promise to translate into improved ROI for HRO clients. Find out which behind-the-scenes strategies will save you money in 2009.
To reach a projected $3.2 billion in sales, HRO intends to drive new business through several strategic initiatives.
A La Carte Service
Industry analysts are predicting more componentized deals, allowing companies to select specific services to outsource while retaining others in-house. HR outsourcing suppliers are building greater flexibility into service agreements, allowing clients on-demand service changes and pay-as-you-go pricing. With cost reduction a top priority, new clients will target transaction-intensive processes for outsourcing. Human resources outsourcing services include:
- Payroll and benefits
- Recruiting
- Performance management
- Compensation
- Learning
HRO clients can trim expenses by accessing available resources only as needed, scaling outsourced services to meet changing needs. In a volatile economy, this sort of flexibility is crucial to maintaining a lean business.
Human Resource Management System (HRMS) Technology
Human resource management system (HRMS) technology has hitherto served as something of a competitor to HRO. HRMS facilitates in-house human resources, providing a global view of human capital and automating tasks such as payroll, benefits, recruiting, training, and performance tracking. A technological solution can increase in-house efficiency, rendering outsourcing unnecessary.
In 2009, however, analysts predict an increased adoption of HR technology by outsourcing providers. By making this technology available to clients on a Software as a Service basis, HRO suppliers present an attractive proposition for companies looking to avoid a large capital outlay. Clients benefit from subscription-based access to both the state-of-the-art technology and the providers outsourced human resources team.
Consolidation in the HRO Industry
Consolidation among HRO suppliers will bring better value to clients outsourcing multiple processes or implementing a large-scope human resources solution. Industry analyst Everest Research Institute expects to see consolidation via mergers and acquisitions as well as via partnerships among independent suppliers. Providers will consolidate in order to broaden their expertise into new processes and technology; widen their geographical footprint; and expand their market share.
For HRO clients, consolidation promises greater efficiency and access to broader services, as well as a reduction in the cost of multi-process service contracts. Continuity between services alone produces greater value. For example, a global HRO supplier might partner with a specialized Recruitment Process Outsourcing (RPO) provider to deeper recruiting services in specific geographies. Their clients benefit from both the reach and economy of a global HRO and the local recruitment relationships of the partner.
The coming year offers a promising outlook for human resource outsourcing suppliers and clients alike. As the market for outsourcing human resources matures, the industry will drive growth by increasing the efficiency and breadth of its services. In a climate of pessimism and gloomy forecasts, companies finally have something to cheer about.
by VendorSeek.com
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Preparing for Your Upcoming Shortage of Key People
Did you know that the cost of replacing retiring or departing employees in your business could be in the millions of dollars over the coming decade? And while hiring retirees as contractors can fill the skills gap, it will also slow your corporate adaptation efforts.
With the looming retirement of Baby Boomers, many companies are ill prepared for the accelerating talent shortage to follow. They haven't done enough to improve their hiring and employee retention practices, or establish succession programs. Consequently, they will struggle in attracting needed talent and sector skills in the competitive future. They will not stand out in comparison amongst employers and will find themselves unable to afford the replacement cost for comparable skills.
The time to act is now, since your hiring competitors may have already taken significant steps to position themselves as an attractive employer - an "Employer of Choice."
It's critical to recognize both the attraction and retention issues faced. Changing your internal practices to become a competitive employer will be a significant undertaking. Board members and shareholders must be alerted to the issues and make the choice to enable you to successfully compete for talent and retain proprietary information.
The first step is generally to craft the business case which highlights the risk to the company and proposes an action plan to make your business a desirable employer - which boards and shareholders
must consider seriously. Backed up by research and best practices, identify what your company needs competitively to be a more attractive employer, together with an appropriate budget for this effort.
Here are some of the areas such a presentation might address (customized to your business, its location and priorities):
• The cost profile of replacing retirements/departures
• The upcoming labor force demographics in Canada and specifically your region
• The folly of relying on contracted retirees as a stop gap
• What today's employees are looking for
• What other similar or competitive businesses are doing to attract and retain employees
• Human resource costs - direct and indirect
• The training costs of training up internal and external candidates based on the difficulty in replacing critical skills in a more competitive marketplace
• Financial and other implications arising from inability to service your customers until internal knowledge base is replace
• A plan for transitioning your business to becoming a more competitive employer
• Proposed budget and how to pay for the transition
• Measurable success criteria
Everyone knows that a few key people can make a huge difference to your business. If you have those people now - it's important to ensure that you don't lose them. If you need to add those people, you need to be their most attractive option.
 About the Author:
David Boyle, president of HR-on-Demand, has over 30 years experience in designing and implementing strategies and tactics for outsourced human resources expertise.
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