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HR outsourcing helps businesses reduce costs, minimize risk and alleviate HR administrative burdens.
Industry Trends
- The HR BPO market is forecast to grow from $20.8 billion in 2004 to $31.3 billion in 2009, reflecting an 8.3% compound annual growth rate (CAGR). The estimated revenue is $28.69 billion in 2008. Based on the geographic region, North America is the biggest HR BPO Market in the world which contains 63.9% of the worldwide estimated revenue – $18.33 billion. (Source: Robert H. Brown, “Gartner Research – Sourcing options Grow as the HR BPO Market Matures”, July 26, 2006)
- 85% of HRO transactions include IT. Technology transformation is a primary driver of HRO. (Source: Everest Research Institute, “Human Resources Outsourcing Annual Report – Preview Deck”, November 2007)
- The HRO industry is at a critical point in its short history. Buyers are increasingly looking at HRO as an opportunity to streamline processes, reduce direct and indirect costs, get access to the latest technology and tools, consistently achieve better quality, and align HR with the overall business in the fastest time possible.
(Source: Everest Research Institute, “HRO Benchmarks: Scope, Quality, and Pricing”, 2007)
Average median cost to administer HR internally for small businesses is $1469.00 per employee per year. – US SBA
MMC is consistently evolving to provide the most innovative Human Resources Outsourcing solutions. Our service solutions are catered to answer to the most demanding challenges business organizations are beginning to face: increasing litigation and complex HR issues that deter business owners from what they do best.
Increase Efficiency
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60% to 80% of an employer’s time is spent on non-productive administrative work. – Forrester Research
Reasons why small to medium sized businesses are looking to HR Outsourcing services:
- Increase your company’s values and core competency
- Avoid redundant administrative work
- Employers can focus on their core business
- Being able to offer employees the same benefits plan as large corporations
Reduce Costs
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1 in 4 privately held companies have been sued by an employee or former employee. – Forrester Research
Protecting your business from liability and risk is simple with MMC’s innovative HR Outsourcing solutions. Nearly 30 years of HR and labor law compliance expertise separates us from our competition.
- Federal and state laws change almost daily. MMC works with you to keep abreast of these changes and to help you stay in compliance with wage and hour laws.
- MMC assures your business and employees are protected from on-the-job injuries and claims arising from the work environment.
Manage Risks
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The new HR – the HR function is responding with a shift from managing the monetary levers of human resources – compensation, benefits, and other expense – to increasing the asset value of human capital, as measured by intangibles such as employee engagement.
Industry Terms
- HRO = Human Resource Outsourcing
- HR BPO = Human Resource Business Process Outsourcing
- PEO = Professional Employer Organization
Industry Significant Facts
- Average median cost to administer HR internally for companies with less than 250 employees is $1469.00 per employee per year (Source: US SBA)
- The average business owner spends between 7% and 25% of his or her time handling employee-related paperwork. When you add in the time spent on all the other HR tasks, this figure rises from 35% to 45%. (Source: U.S. Small Business Administration)
- 60% to 80% of an employer’s time is spent on non-productive administration (Source: Forrester Research, Inc.)
- Generally, in comprehensive HR outsourcing deals, at least a 10% to 15% cost reduction should be expected; 20 percent to 30 percent is a typical average – obtainable based on the calibration of the following seven variables: Degree of HR consolidation required, Leverage of standardized platform, Amount of global delivery applicable, Transfer of HR personnel to the vendor, Scope of HR services included, Length of the HR outsourcing contract and Degree of complexity required for HR outsourcing key performance indicators. (Source: Robert H. Brown, “Gartner Research – Seven Critical Variables Reduce Costs in HR Outsourcing Deals, June 1, 2006)
- The median jury award for employment cases in 2005 – $276,711.00 (Source: ABA)
- There are more than 40,000 pages of federal employment regulations plus state and local regulations (Source: US SBA)
Why do large corporations need HRO services?
Advantages for Using HRO services:
- Reduce Liabilities
- Reduce Costs
- Reduce Risks
- Save Time and Increase Efficiency
- Better and Convenient Technology
Manage Risks
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