Human Resources Outsourcing - Solutions, Suppliers, Key Processes and the Current Market
- Published: July 2007
- 150 Pages
- Ashgate Publishing
- British Telecom
- Hewitt (Exult)
This Orion Partners' report addresses the main considerations for an organization investigating a large-scale transference of HR transactional activity to an outsource provider. The report also provides an overview of the market for HR outsourcing services in Europe. There are sections profiling each of the main outsourcing providers in the UK and continental Europe and case studies drawn from both the public and private sector.
Human Resources Outsourcing agreements, which typically run for seven years or more, have a critical influence on any organization's ability to deliver its long-term strategy. The Orion Partner's report is a valuable contribution to identifying the right model, locating the right partner and realising the value of one of the most important elements in the current strategic investment for large organizations. It also provides helpful advice on how to manage the impact of outsourcing on the retained HR team.
This report provides an overview of the main developments in the growth of the market for HR outsourcing in Europe since the late 1990s. HR outsourcing is not a new phenomenon. Individual HR services such as recruitment, payroll and training
delivery have a long and proven record of successful provision via specialist third party providers. What the emergence of organisations such as Exult and Xchanging established was a new market for full-scope HRO transactional outsourcing which covered all parts of the employee life cycle administration as well as deep line manager and employee advisory services. This report focuses on the full-scope HRO deals and providers rather than the plethora of single service line outsourcing suppliers.
The report is structured as follows:
Overview of the European HRO market covering the major deals signed since 1998, the principle providers and specific details about the major public sector contracts that have been signed to date.
Summary of what HR services are frequently, occasionally and rarely outsourced based on the deals that have been signed to-date.
Review of the implications for the retained HR function which highlights the options for focusing the efforts of the professional HR community who remain out of scope of the HRO deal.
Summary of the main contractual options that have been used to structure outsourcing deals (from the straightforward supplier/customer arrangement to the more complex special purpose vehicle/joint venture options).
Review of the common approaches to managing the transition of services and people to the new arrangements including indicative timings, risks and issues.
The appendices provide detailed vendor information and a deal summary of the major and minor HRO deals over the last 8 years and more detailed case studies of the deals between:
- BP/Hewitt (Exult)
- AFPAA (Armed Forces)/ExcellerateHRO (EDS/Towers Perrin)
- Westminster City Council/Vertex (United Utilities)
- Lloyds TSB/Xansa
About the Author/Editor
Ian Hunter is a founding partner of Orion Partners, a consultancy specialising in providing independent advice to organizations considering outsourcing their Human Resources department. He has worked for a number of leading management consultancies, including Accenture and AT Kearney and has been an HR Director in two blue chip organizations.
Jane Saunders is one of the founding partners of Orion Partners. Jane is an experienced international consultant, with significant experience in the area of HR Strategy and Transformation.
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1. EXECUTIVE SUMMARY
European Market – Key Facts
SCOPE OF SERVICES
THE IMPLICATIONS OF HRO FOR RETAINED HR
CONTRACTUAL OPTIONS FOR DELIVERY OF HRO
THE TRANSITION PROCESS
3. OVERVIEW OF THE EUROPEAN MARKET SIZE AND GROWTH
Other potential players
SUPPLIER MARKET SHARE
Leading Suppliers in European Market
PUBLIC SECTOR SPECIFIC DEALS
4. INDICATIVE SCOPE OF SERVICES
Frequently Outsourced Services Include
Occasionally Outsourced Services Include
Rarely Outsourced Services Include:
5. IMPLICATIONS FOR THE RETAINED HR FUNCTION
Service Led Design
Discrete Vs Embedded Activity
Retained HR Organisation Design
What advisory services should be in scope?
HR Business Partners
MANAGING THE RELATIONSHIP
Key Service Forums
NEW ROLES, SKILLS AND CAREER PATHING
Contract and Service Management
Improved Business Planning
Internal Consultancy Skills
Career Pathing and Career Management
6. CONTRACTUAL OPTIONS
7. ENGAGEMENT AND TRANSITION
Factors Influencing the Transition Approach
Example Transition Responsibilities
APPENDIX A: HR BPO DEALS EUROPE >$50M TCV ’99–‘06
APPENDIX B: CASE STUDIES
CASE STUDY 1. BRITISH TELECOM/ACCENTURE
CASE STUDY 2. BP/HEWITT (FORMERLY EXULT)
CASE STUDY 3. ARMED FORCES PERSONNEL AND ADMINISTRATION AGENCY/EXCELLERATEHRO
CASE STUDY 4. WESTMINSTER CITY COUNCIL/VERTEX
CASE STUDY 5 – UNILEVER/ACCENTURE
CASE STUDY 6 – LLOYDS TSB XANSA
CASE STUDY 7: BBC/CAPITA
APPENDIX C: LEADING PR0VIDER PROFILES
Provider Profile – Accenture
Provider Profile – Affiliated Computer Services
Provider Profile – Fidelity Employer Services Company
Provider Profile – Hewitt (Exult)
Provider Profile – IBM
APPENDIX D: SCOPE OF SERVICES
- British Telecom
- Hewitt (Exult)
- Lloyds TSB
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