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Although, benefits administration off-shoring / outsourcing has been taking place for more than a decade, today's vendors aim to perform the entire functions of a HR department. Previously, off-shorers / outsourcers had the knowledge and expertise pertaining to one area of HR only i. e. contribution administration, and knew zilch about HR information systems or vice versa. Today, success that has come from off-shoring / outsourcing has led specialised vendors to merge in a bid to create a one-stop shop for global employers. Now, companies looking to run a particular department at half cost are smoothly able to unload the entire work to an offshore / outsourcing vendor without tying up the works.
And, as the off-shoring / outsourcing market matures, costs across all segments have experienced a sharp decline, as much as 20% in the last four to five years. Overheads for buyers with more than 25, 000 employees seem to be coming down faster than for those with a workforce less than 25, 000. That, is not to say small-time employers will not reap the benefits of off-shoring / outsourcing, its influence will definitely accelerate in the future as the off-shoring / outsourcing market continues to mature.
With HR service buyers reaping the cost reduction benefits of off-shoring / outsourcing compound functions, many more HR processes are being off-shored / outsourced to vendors, as a direct result. Certainly, one-stop stopping seems to be hitting the mark, and February 2005 saw British Telecom sign a 10-year contract renewal deal with Accenture for providing recruitment, benefits and pension administration, performance management and payroll administration services. BT was not the only one to offshore / outsource its entire HR administration; it kept good company with Marriott International Inc. and Delta Air Lines Inc. who joined it in off-shoring / outsourcing their entire HR business.
Off-shoring / outsourcing HR functions by companies is gaining momentum, not only because it helps control healthcare costs, it also leaves just one throat to choke, i. e. the vendor's if HR processes don't function smoothly, and one back to pat if things go as planned. As HR off-shoring / outsourcing speeds up, the only people to be left in HR departments of numerous companies will be the people responsible for strategic planning.
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