HR outsourcing has not been trouble free. Consider payroll. It is one thing when the recruiting system is not exactly what executives are looking for, but miss or mishandle payroll, and it is a crisis. Payroll has historically been an “easy out” to have someone else do. But that was typically on a national scale. Global payroll is something else entirely. Today, there really is no one provider who can deliver payroll globally. In fact, a large pharmaceutical company who told us they had nearly 140 different payroll platforms around the globe. Unfortunately, that is not uncommon. We have even heard of an HRO provider who forgot to pay an entire country.
There are many reasons the big, early HR outsourcing models did not come to fruition. HR was the last to the game when it came to outsourcing. IT had been there a long, long time. Finance followed. Even procurement came out before HR. When you think about the touch point a company has with every single employee in the company, it is very concerning to hand it to someone else—even with the idea of savings.
When HR outsourcing all of a sudden became very hot, many providers did not have the experience or strength to make it
But when HR outsourcing all of a sudden became very hot, many providers did not have the experience or strength to make it. HR outsourcing never really adjusted to the one-to-many platform that worked for other outsourced areas. On top of that, the clients wanted to significantly customize, so the providers obliged, breaking the economic model.
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