May 15, 2007

HRO doubles

A TPI report states:

The number of companies that have outsourced a human resources (HR) function doubled from 2004 to 2006, TPI's research shows. This growth, coupled with the fact that the majority of these companies also have multiple HRO processes in place, shows the need for better tools to help maintain quality, consistency, and efficiency for the industry.

Working with HRO providers, TPI created a framework for a common taxonomy for HRO services, as well as standard pricing units and a robust set of service levels across all HR processes. As the HRO market continues to mature, TPI expects to see more standardization for service offerings, pricing norms and service levels.

In the early years of HRO, there were different ways of describing, pricing and measuring services, said Debora Card, project director of Human Resources Advisory Services at TPI. As the market continues to mature, we wanted to combine input from the major service provider experts in HRO with TPIs depth of expertise in the market to rationalize some of these basic constructs across the industry.

Of course, there will be a lot of HR services that will not be very easy to categorise, like outsourcing training (Which can range from outsourcing delivery of training, to outsourcing design and delivery too, or even outsourcing training needs analysis) and recruitment (from contingent recruiting to higher-end retained search). And what about skills like Organization Development (OD) that are typically outsourced because it's not a regularly used in organization. I guess this report did not focus on these kinds of outsourcing, but merely the systems side of outsourcing like HRIS, Payroll and the like.