outsourcing

1. Not our core business - management doesn't see a place for the function in-house.

2. Leverage better technology, particularly the internet.

3. In house staff are leaving and can't find replacements without high cost.

4. Lower costs overall by economy of scale with vendor.

5. Better Customer Services, e.g., service representatives, internet, etc.

6. Integrated benefits services (seamless approach)

7. Better communications (written, oral and on-line).

8. Participants want more services - meets needs.

9. Reduce administrative burden.

10.Meet ever changing business needs.

1. Actually costs more than in-house.

2. Vendors won't bid on full services

3. Distrust of outsiders doing benefits work.

4. Management is satisfied with service and technology levels. Don't support outsourcing.

5. In house resistance by HR or others would make outsourcing a failure.

6. Plans too complicated for efforts required to outsource.

7. Already have efficient and economic in-house service center.

8. Use of e-hr will make it easier and cheaper for a company not to outsource.

9. Outsourced with bad results and brought back in-house.

10.Won't reduce in-house staff.

Benefits and payroll outsourcing are the rage. It seems like everytime you turn around another company is outsourcing something. I don't really think there is a clear cut answer for every company. It really makes sense for some companies to outsource benefits and other functions, yet, for others it's better to keep in-house. Things are changing so quickly that what may look like a good solution today, will be a mistake tomorrow. I believe the biggest impact on whether it's outsourced or kept in-house is going to be e-hr technology. The internet and web based HR applications are going to change our premises. But, the internet is really just the "front page" to benefits delivery.

You can have the neatest website in the world, yet you can't delivery benefits to anyone. Success will be how you surround administrative support for your web based e-hr applications. Who pays the medical vendors? How are life event changes really handled? What happens if an employee has a medical emergency and they can't get to your wonderful e-hr homepages. Success will be a combination of all the technology and old school administrative processes.

Let's say you outsourced something. Now the big question is how do I manage the vendor or supplier of services. The first stage was getting to the decision to outsource. That was hard enough and we all figured that once done our life would be easy. But wait, seems like it's more difficult now than before we outsourced. Contracts, performance guarantees, client meetings, work priorities of the vendor, changing staff, sorry - won't fit the system - can't do, costs are higher than expected, etc. etc.. Not to say there aren't a lot of great things too, like, offering great communications, internet access that could never have been done in-house. Also, being able to meet ever changing business needs because you have a partner who is there to support you.

This is really the key, is your outsourcing vendor just a vendor and you just a client, or is there something more between you? A true partnering relationship! I went to a seminar where a speaker said you really never have a partnering relationship with a vendor because you have opposing objectives... they want to make money on charging you for services, and you want to pay less.

Bottom line, if you don't work towards a partnering relationship with your vendor, you are going to have a lot of trouble. If you work for a company that never changes anything then maybe the vendor concept is ok.

But if you work for a company that makes some kind of change frequently.... if your vendor isn't in tune with your business model, look out! Conflict will develop, your management will not be happy with you or the vendor. Everyone will blame everyone else. As you may tell, I'm a strong believer in the partnering concept.

To learn more about partnering click on the partnering with the vendor icon below: Thanks. HRWisdom.com