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HR outsourcing not on the increase, says survey

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Most SMEs and large companies don’t plan to outsource any of their HR functions in the near future, even if they already outsource some, according to a new survey.

The survey, carried out by Metrica Research for Northgate Information Solutions, found that although two-thirds of SMEs and up to 84% of larger companies do now outsource a range of business functions, just a quarter of large companies and 12% of SMEs were looking to increase the number of HR services they currently outsourced.

The research also attempted to establish the proportion of time spent by HR departments on particular activities. 50% of HR departments in large companies and 75% HR departments in SMEs spend between 2-3 days a week administering and managing day-to-day HR activities. A further half a day a week is spent on keeping up to date with regulations, with 20% of large companies spending 40% or more of their time on recruitment.

When asked about the pros and cons of outsourcing, most companies saw increased efficiency, productivity, the flexibility to pay just for HR services they used and access to more legal support as key benefits. Drawbacks to using an outsourced service included loss of a face-to-face personal service, the perceived quality and commitment of external staff, loss of control, privacy and security of data and cost.


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