A dominant majority (60%) of business organizations use the centralized shared-services model for HR services, while about 40% use a model that combines some sort of outsourcing which internally provides HR services, says a new study by BenchmarkReports.com, a service by Best Practices — a benchmarking research and analysis firm. The research findings indicate that not a single company among the 40 companies studied by the firm has completely outsourced its HR functions.
The findings are in sync with those of another such study conducted recently by The Hackett Group, a major benchmarking-services company (See Shared Services Centers Far More Popular than Outsourcing in F&A). The Hackett Group study, that covered finance processes, as opposed to BenchmarkReports.com’s HR processes, had concluded that while as much as 65% of financial processes are delivered through the shared-services model, only 4% of them are outsourced, either onshore or offshore. Fifty-eight companies took part in the study by the Hackett Group.
The areas benchmarked in the research by BenchmarkReports.com included: Organizational structures, staffing levels, functions outsourced, vendor management and internal satisfaction, as they pertain to HR service delivery models. Industries profiled included pharmaceuticals, consumer products, telecommunications, financial services and manufacturing.
The research further concluded that there is a wide variation in the level to which different HR processes are outsourced. For example, while processes like employment verification and award management are outsourced by most companies (73% and 55% respectively); other processes such as large-scale data updates and management of HR system tables are done largely, internally. Only nine percent of the companies outsource management of HR system tables.
The study also identified the most automated Leave of Absence (LoA) processes. Tracking of leave dates and milestones are automated in 53% of companies. The average number of automated processes was 3.6 across all companies. For large companies, the average was 6.4 and for highly outsourced companies, the average was 7.5 processes per company, according to the study.
