1. Will It Work For Your
Organization

2. Purpose of this presentation
Understand the Outsourcing Industry
Consider HR Outsourcing as an asset to
the organization - not a threat
Realize the importance of diversification
and strategic planning to expand HR
functions and operations outside of the
organization
HR Outsourcing – Will It Work For Your Organization

3. "If you think you're too small to have an
impact, try going to bed with a mosquito
in the room." (Dame Anita Roddick,
1942-2007, British businesswoman,
humanitarian, founder of The Body
Shop,)
HR Outsourcing – Will It Work For Your Organization

4. "The minute you start thinking that
you've done it all, that's when you're in
the rear view mirror." (Chris DeWolfe,
co-founder of MySpace.com, talking
about market leading and innovation,
quoted in the Guardian newspaper, 10
Nov 2008.)
HR Outsourcing – Will It Work For Your Organization

5. Reasons to consider HRO options
Relief of administrative burdens draining
growth and efficiency
Technological improvements without
significant investment
Economies of Scale in employee benefits
Maintaining efficiency and productivity in a
tough economy
HR Outsourcing – Will It Work For Your Organization

6. Adding additional services and products
normally inaccessible
Expanding expertise and services outside of
the organization
Simplifying processes and procedures
Reducing overhead in staffing while
maintaining or expanding current operations
HR Outsourcing – Will It Work For Your Organization

7. Benefits of Outsourcing to Employers
Controls costs, saves time and paperwork
issues
Provides professional compliance
Reducing overhead in staffing while
maintaining or expanding current operations
HR Outsourcing – Will It Work For Your Organization

8. Outsourcing Benefits for HR
Provides a greater resource for hands-on HR
assistance and process delivery
Access to HR products, services, programs
and technology
Assistance with employee issues
Consolidation of compliance methods
Relief from administrative burdens
HR Outsourcing – Will It Work For Your Organization

9. Outsourcing Options to Employers
• Human Resources
• Benefits, Benefits Administration, Enrollments
• Workers’ Compensation and Safety
• Payroll
• Staffing and Recruiting
• Accounting
• I.T.
HR Outsourcing – Will It Work For Your Organization

10. Why HR must innovate every single day
HR Outsourcing – Will It Work For Your Organization

11. The Premise (and Promise) of
HR Outsourcing
• Internal efficiency gains are insufficient
• Economies of scale will drive down costs
• Retained staff can focus on strategic activities
• Less customization and more standardization
• Innovation will continue post go-live
• Provider sustainability is a non-issue
HR Outsourcing – Will It Work For Your Organization

12. The Reality (For Some) Was Quite
Different
• “Your mess for less”
• Customization prevailed
• Production deadlines were missed
• Scope was too aggressive
• Shadow organizations emerged
• Third parties exited the market
HR Outsourcing – Will It Work For Your Organization

13. What are Professional Employer
Organizations (PEO)?
The PEO Industry began in the 1980’s
Early pioneers struggled to develop a niche
Initially, several ‘bad apples’ gave the industry
a shady reputation
Florida was the catalyst state for the future of
the PEO Industry
HR Outsourcing – Will It Work For Your Organization

14. 2010 Professional Employer
Organizations – The Future
Today, the National Association of PEO’s
(NAPEO) is a leader of HR Outsourcing
SHRM and NAPEO share common interests
with national employment legislation
Many PEO’s develop best practices in
Human Resources Outsourcing
NAPEO has over 350 PEO organizations
nationally
HR Outsourcing – Will It Work For Your Organization

15. Understanding Florida Outsourcing
PEO’s in Florida:
• Commonly known as Staff Leasing
• Lease the employees back to the Client
• The Client maintains direction and control
• Offer value-added products/services for a
price normally based on percentage of
payroll
HR Outsourcing – Will It Work For Your Organization

16. • Offering Administrative Services Only models
(ASO/HRO)
• Employ more than 900,000 employees
• Service over 69,000 companies
• Pay over $25 Billion in Payroll
• FAPEO Task Force is currently working on UI
issues for possible legislative consideration
HR Outsourcing – Will It Work For Your Organization

17. Gartner, Inc. is an information technology research and advisory firm
headquartered in Stamford, Connecticut. •
Gartner predicted 85% of US companies would outsource at least 1 HR
function by 2006
87% of companies interviewed by KPMG (global network of professional
firms providing Audit, Tax and Advisory services) mentioned they planned
to keep outsourcing level the same or increase it. 42% of the organizations
believe that their sourcing contract has definitely improved their financial
performance, and 27% said that sourcing has definitely improved their
competitiveness.
• Realizing the importance of diversification and strategic planning to
expand HR functions and operations outside of the organization.
HR Outsourcing – Will It Work For Your Organization

18. Human Resources business process outsourcing
(BPO) is the fastest-growing segment of HR services
and will grow at a compound annual growth rate
(CAGR) of 16% in the United States, reaching $18.9B
in spending by 2010. In 2004, 37% of US HR
outsourcing spending was on HR BPO services. IDC
projects that HR BPO services will continue to grow,
reaching 46% of HR outsourcing spending in 2010 as
the market solidifies and leaders achieve profitability
through economies of scale.
HR Outsourcing – Will It Work For Your Organization

19. Making the Outsourcing Transition
Assess Your Objectives
Determine Transactional needs from Strategic
needs – or do you need both
What are you long term/short term objectives
Determine your internal strengths and
weaknesses to assess the amount of integration
with the Outsourcing Provider
HR Outsourcing – Will It Work For Your Organization

20. Making the Outsourcing Transition
Transparency
Agreeing on the principles of collaboration is
the first step in the process
The PEO and prospective Client must both
understand that transparency and candor are
key in establishing the HRO relationship
The biggest mistake is the lack of clarity on the
protocols and not discussed early and often in
Outsourcing engagements
HR Outsourcing – Will It Work For Your Organization

21. Making the Outsourcing Transition
Complete Collaboration
Accountability, responsibilities, and
authorities must all be spelled out
Create a framework of communication that
allows clear and honest direction and control
Work continuously together to improve the
commitment for a long term relationship
HR Outsourcing – Will It Work For Your Organization

22. Making the Outsourcing Transition
Define Immediate Needs and Provider
Capabilities
If you just need Payroll Services, then a full service
Provider may not be your answer
Ensure the Outsourcing Provider can meet or
exceed your immediate needs and expectations
Always conduct Due Diligence and check existing
Client References
HR Outsourcing – Will It Work For Your Organization

23. Making the Outsourcing Transition
Define Productivity
When integrating business models each
organization may have different perspectives
about what is effective and efficient
The Outsourcing Provider should work with the
prospective client to fully understand workforce
management
The relationship should be a compliant
partnership and not a hindrance to growth
HR Outsourcing – Will It Work For Your Organization

24. Making the Outsourcing Transition
Measure Results
Increased expenses occur with Outsourcing but
the results should outweigh the costs
Improvements in processes, procedures,
products and services must be realized quickly
Even though Outsourcing competition is fierce,
analyze the true value of great customer service
and best practices to your organization and you
will enjoy a long term relationship
HR Outsourcing – Will It Work For Your Organization

25. If we keep doing what we're doing,
we're going to keep getting what we're
getting.
- Stephen R. Covey
HR Outsourcing – Will It Work For Your Organization

26. Thank You!
NAPEO, PEO Insider, June 2009, February 2010
Mark Stelzner, Principal, inflexion Advisors, LLC
The HR Outsourcing Evolution, SHRM Web cast,
June 17, 2010
NAPEO, FAPEO, 2010
Questions?
HR Outsourcing – Will It Work For Your Organization

27. Contact Information
David F. Jefferson
Vice President of Operations
djefferson@simplehr.com
36474 Emerald Coast Parkway, Bldg B
Destin, FL 32541
850-650-9935 extension 12
www.simplehr.com
HR Outsourcing – Will It Work For Your Organization