| Large employers that outsource at least one HR function expect to do more outsourcing over the next three years, according to a survey by Hewitt Associates.
Benefit functions, many of which were the first in an organization to be outsourced, will continue to be handed off to vendors. Health and welfare benefit outsourcing is predicted to jump from 68 percent this year to 83 percent in 2008 along with defined benefit plan administration rising to 83 percent in three years from 68 percent today.
Other areas Hewitt sees as the most fertile for outsourcing include leave management, recruiting and training. When cost savings was the primary objective for outsourcing, large companies realized savings 80 percent of the time. However, outsourcing can be fraught with complications for employers. Listed below are the Top 10 mistakes to avoid when outsourcing:
- Skimping on employee service
- Picking the wrong technology
- Taking a piecemeal approach
- Confusing core/critical functions
- Failing to define the scope
- Not communicating expectations
- Not understanding the impact of change
- Not setting performance criteria and success measures
- Neglecting security
- Signing an inadequate service agreement
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