Study Finds Nine in Ten HR Outsourcers Satisfied

According to the Global Decision-Makers Study on Business Process Outsourcing (BPO) by PricewaterhouseCoopers, companies that have outsourced human resources services processes believe that they made the right decision in doing so.

Business process outsourcing is defined as the long-term contracting of a company's non-core business processes to an outside service provider. According to industry estimates, the global BPO market in 1998 was valued at $80 billion and is expected to more than double in size to $200 billion over the next five years.

The PricewaterhouseCoopers study, conducted by Yankelovich Partners among 304 Chief Executive Officers, Chief Financial Officers, Chief Operating Officers and Chief Information Officers at large multinational firm worldwide, found that:

• On a global basis, outsourcing of HR services is most prevalent in Canada (58 percent) and the United States (57 percent), followed by Australia (44 percent), Japan (40 percent), Europe (21 percent) and South America (10 percent).
  
• About nine out of ten (91 percent) executives at companies that outsource HR services say they are satisfied with their BPO initiatives.
  
• Three out of five (62 percent) report that cost savings resulting from their BPO initiatives have either met or exceeded their expectations.
  
• HR services outsourcers believe that BPO enables them to: focus on core competencies (96 percent), achieve greater efficiency without having to invest in people and technology (91 percent), become more profitable (85 percent) and provide better service levels than internal departments can provide (66 percent).

Alan Little, Business Process Outsourcing partner at PricewaterhouseCoopers, said, ``Outsourcers of human resources services are becoming strong proponents of BPO as a blueprint for organizational success. BPO frees them to focus on core business and building competitive advantage, ultimately helping them to be more profitable and more valuable to shareholders.''

Diane Shelgren, managing director in the BPO practice of PricewaterhouseCoopers, said, ``We are witnessing a fundamental change in the way companies outsource human resources services. Instead of outsourcing one function at a time to different BPO providers, companies are moving toward end-to-end business process outsourcing in which the entire HR process is outsourced to one provider. In our experience - and according to industry analysts - this is where the real gains are made in cost efficiencies, operational performance and shareholder value creation.''

PricewaterhouseCoopers has developed a number of thought leadership initiatives designed to promote global awareness of and insight into the use of BPO as a critical management strategy. These include the Global Top Decision-Makers Study on Business Process Outsourcing, which provides comprehensive research and analysis of the BPO practices of over 300 of the world's leading corporations, and the Outsourcing World Achievement Awards. Presented annually in conjunction with The Corbett Group, the awards honor academic and business leaders who have made significant contributions to the outsourcing industry.

PricewaterhouseCoopers also co-sponsors the Most Innovative Human Resources Department Award with Linkage Incorporated. This award recognizes human resources departments that have successfully organized themselves to help their company achieve its strategic business goals.

Currently, PricewaterhouseCoopers says it manages outsourcing programs for more than 500 multinational corporations and other large organizations around the world.