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Jefferson - HR Outsourcing: Will it Work for Your Organization

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  • 1. Will It Work For Your Organization
  • 2. Purpose of this presentation Understand the Outsourcing Industry Consider HR Outsourcing as an asset to the organization - not a threat Realize the importance of diversification and strategic planning to expand HR functions and operations outside of the organization HR Outsourcing – Will It Work For Your Organization
  • 3. "If you think you're too small to have an impact, try going to bed with a mosquito in the room." (Dame Anita Roddick, 1942-2007, British businesswoman, humanitarian, founder of The Body Shop,) HR Outsourcing – Will It Work For Your Organization
  • 4. "The minute you start thinking that you've done it all, that's when you're in the rear view mirror." (Chris DeWolfe, co-founder of MySpace.com, talking about market leading and innovation, quoted in the Guardian newspaper, 10 Nov 2008.) HR Outsourcing – Will It Work For Your Organization
  • 5. Reasons to consider HRO options Relief of administrative burdens draining growth and efficiency Technological improvements without significant investment Economies of Scale in employee benefits Maintaining efficiency and productivity in a tough economy HR Outsourcing – Will It Work For Your Organization
  • 6. Adding additional services and products normally inaccessible Expanding expertise and services outside of the organization Simplifying processes and procedures Reducing overhead in staffing while maintaining or expanding current operations HR Outsourcing – Will It Work For Your Organization
  • 7. Benefits of Outsourcing to Employers Controls costs, saves time and paperwork issues Provides professional compliance Reducing overhead in staffing while maintaining or expanding current operations HR Outsourcing – Will It Work For Your Organization
  • 8. Outsourcing Benefits for HR Provides a greater resource for hands-on HR assistance and process delivery Access to HR products, services, programs and technology Assistance with employee issues Consolidation of compliance methods Relief from administrative burdens HR Outsourcing – Will It Work For Your Organization
  • 9. Outsourcing Options to Employers • Human Resources • Benefits, Benefits Administration, Enrollments • Workers’ Compensation and Safety • Payroll • Staffing and Recruiting • Accounting • I.T. HR Outsourcing – Will It Work For Your Organization
  • 10. Why HR must innovate every single day HR Outsourcing – Will It Work For Your Organization
  • 11. The Premise (and Promise) of HR Outsourcing • Internal efficiency gains are insufficient • Economies of scale will drive down costs • Retained staff can focus on strategic activities • Less customization and more standardization • Innovation will continue post go-live • Provider sustainability is a non-issue HR Outsourcing – Will It Work For Your Organization
  • 12. The Reality (For Some) Was Quite Different • “Your mess for less” • Customization prevailed • Production deadlines were missed • Scope was too aggressive • Shadow organizations emerged • Third parties exited the market HR Outsourcing – Will It Work For Your Organization
  • 13. What are Professional Employer Organizations (PEO)? The PEO Industry began in the 1980’s Early pioneers struggled to develop a niche Initially, several ‘bad apples’ gave the industry a shady reputation Florida was the catalyst state for the future of the PEO Industry HR Outsourcing – Will It Work For Your Organization
  • 14. 2010 Professional Employer Organizations – The Future Today, the National Association of PEO’s (NAPEO) is a leader of HR Outsourcing SHRM and NAPEO share common interests with national employment legislation Many PEO’s develop best practices in Human Resources Outsourcing NAPEO has over 350 PEO organizations nationally HR Outsourcing – Will It Work For Your Organization
  • 15. Understanding Florida Outsourcing PEO’s in Florida: • Commonly known as Staff Leasing • Lease the employees back to the Client • The Client maintains direction and control • Offer value-added products/services for a price normally based on percentage of payroll HR Outsourcing – Will It Work For Your Organization
  • 16. • Offering Administrative Services Only models (ASO/HRO) • Employ more than 900,000 employees • Service over 69,000 companies • Pay over $25 Billion in Payroll • FAPEO Task Force is currently working on UI issues for possible legislative consideration HR Outsourcing – Will It Work For Your Organization
  • 17. Gartner, Inc. is an information technology research and advisory firm headquartered in Stamford, Connecticut. • Gartner predicted 85% of US companies would outsource at least 1 HR function by 2006 87% of companies interviewed by KPMG (global network of professional firms providing Audit, Tax and Advisory services) mentioned they planned to keep outsourcing level the same or increase it. 42% of the organizations believe that their sourcing contract has definitely improved their financial performance, and 27% said that sourcing has definitely improved their competitiveness. • Realizing the importance of diversification and strategic planning to expand HR functions and operations outside of the organization. HR Outsourcing – Will It Work For Your Organization
  • 18. Human Resources business process outsourcing (BPO) is the fastest-growing segment of HR services and will grow at a compound annual growth rate (CAGR) of 16% in the United States, reaching $18.9B in spending by 2010. In 2004, 37% of US HR outsourcing spending was on HR BPO services. IDC projects that HR BPO services will continue to grow, reaching 46% of HR outsourcing spending in 2010 as the market solidifies and leaders achieve profitability through economies of scale. HR Outsourcing – Will It Work For Your Organization
  • 19. Making the Outsourcing Transition Assess Your Objectives Determine Transactional needs from Strategic needs – or do you need both What are you long term/short term objectives Determine your internal strengths and weaknesses to assess the amount of integration with the Outsourcing Provider HR Outsourcing – Will It Work For Your Organization
  • 20. Making the Outsourcing Transition Transparency Agreeing on the principles of collaboration is the first step in the process The PEO and prospective Client must both understand that transparency and candor are key in establishing the HRO relationship The biggest mistake is the lack of clarity on the protocols and not discussed early and often in Outsourcing engagements HR Outsourcing – Will It Work For Your Organization
  • 21. Making the Outsourcing Transition Complete Collaboration Accountability, responsibilities, and authorities must all be spelled out Create a framework of communication that allows clear and honest direction and control Work continuously together to improve the commitment for a long term relationship HR Outsourcing – Will It Work For Your Organization
  • 22. Making the Outsourcing Transition Define Immediate Needs and Provider Capabilities If you just need Payroll Services, then a full service Provider may not be your answer Ensure the Outsourcing Provider can meet or exceed your immediate needs and expectations Always conduct Due Diligence and check existing Client References HR Outsourcing – Will It Work For Your Organization
  • 23. Making the Outsourcing Transition Define Productivity When integrating business models each organization may have different perspectives about what is effective and efficient The Outsourcing Provider should work with the prospective client to fully understand workforce management The relationship should be a compliant partnership and not a hindrance to growth HR Outsourcing – Will It Work For Your Organization
  • 24. Making the Outsourcing Transition Measure Results Increased expenses occur with Outsourcing but the results should outweigh the costs Improvements in processes, procedures, products and services must be realized quickly Even though Outsourcing competition is fierce, analyze the true value of great customer service and best practices to your organization and you will enjoy a long term relationship HR Outsourcing – Will It Work For Your Organization
  • 25. If we keep doing what we're doing, we're going to keep getting what we're getting. - Stephen R. Covey HR Outsourcing – Will It Work For Your Organization
  • 26. Thank You! NAPEO, PEO Insider, June 2009, February 2010 Mark Stelzner, Principal, inflexion Advisors, LLC The HR Outsourcing Evolution, SHRM Web cast, June 17, 2010 NAPEO, FAPEO, 2010 Questions? HR Outsourcing – Will It Work For Your Organization
  • 27. Contact Information David F. Jefferson Vice President of Operations djefferson@simplehr.com 36474 Emerald Coast Parkway, Bldg B Destin, FL 32541 850-650-9935 extension 12 www.simplehr.com HR Outsourcing – Will It Work For Your Organization