HRO BY AJITHAA HASAN

Evolving Role of HR  Strategic management decisions  Value-added services  Achieve a competitive edge  Primary functions are based on frameworks: competency-based structural process-oriented profit centers

HRO? n Any activity in which a company lacks internal expertise and confidentiality and requires an unbiased opinion on human resources, can be outsourced. n HR outsourcing services: PEOs, BPOs, ASPs, or e-services.

Professional employer organization (PEO) n Assumes full responsibility of company's HR administration n Takes full legal responsibility of your employees

Business process outsourcing (BPO) n Referring to outsourcing in all fields, not just HR n Putting in new technology or applying existing technology in a new way to improve a process n Self-access and HR data warehousing

Application service providers (ASPs) n host software on the Web and rent it to users n packaged applications (People Soft) or customized HR software

E-services n HR services that are Web-based n Includes BPOs & ASPs HR outsouring categories: Transaction & Administration outsourcing and HR consultancy

Why are organizations outsourcing?

Preference for HRO n Outsourcing of BOP instead of BPO n Saves key people’s time n Concentration on core competency n Enhancing profitability n Mid-sized cos - >87% of funds towards routine processing transactions n Best systems, most experienced minds

Some Statistics n U.S. - >2/3rds of the corporations have outsourced 5 or more HR functions n 98% are ready to further outsource n HR personnel shrunk by 16% n Survey on “Outsourcing in the Asia- Pacific” confirms lack of momentum(5%) n Outsourcing market in APAC region - $1.14 billion in 1999 to $2.56 billion in 2004

Advantages of HRO  Reducing or eliminating fines and penalties by keeping pace with changing government regulations.  Achieving measurable, bottom-line results by increasing efficiency and leveraging outsourcee’s economies of scale.  Lowering infrastructure and facility costs by having the HR function administered off-site.  Sharpening your business focus by eliminating interruptions caused by employer obligations, risks and liability.  Improving employee retention and morale by providing timely answers to payroll and benefits questions.

Advantages (contd..)  Expanding scope and level of service. Your HR department can’t be subject experts in all areas – our staff of more than 65 HR professionals can.  Implementing organizational initiatives that link to your overall business plan: HR becomes strategic, not tactical.  Overall, companies tend to outsource to alleviate administrative burdens and focus on strategic areas

Factors hampering HRO n Cost factor & Confidentiality n The fear of losing jobs n Loss of sensitive information to public/competition n Ethics and quality of outsourcing vendors n Possibility of security breaches n Cost-benefit equation not clear n Lack of psychological acceptance

Outsource activities that  Have high volumes  Are repetitive and routine  Reflect consistent customer needs  Have opportunities to leverage  Are service and efficiency driven  Are easily measurable in terms of performance  Support key business processes  Get influenced by external forces  Require high content expertise  Are ad-hoc, periodic future oriented projects  Are difficult to measure  Have high impact on organization as a result of non performance, failure or mistake Retain activities that

Areas where HRO will work  Relocation  Recruiting/Staffing  Competence Development  Salary Administration  Consulting and Training  HR Information Systems  Disciplinary Issues  HR Surveys  HR Research  Staff Loans and Perks  Manpower and Career Planning

THANK YOU