4 HR Outsourcing Trends Heating up in 2019

Focusing on Growth and Value

Over the past several years, the Professional Employer Organization (PEO) industry has focused intensively on value generation. That’s what employers want; for example, 80% of employers indicate that their recruitment strategy should emphasize value creation over cost savings. Four out of five recruiters are aiming for their work to have a measurable impact on business performance. That means PEO service providers are now focused on providing tangible value to their customers in ways that enable in-house HR departments to be more effective and strategic.

Right-Sizing HR Staffing

Research from consultancy firm The Hackett Group has found that world-class HR organizations have fewer staff in every staffing category, including 33% fewer transactional employees, and 34% fewer staff who deal with employee lifecycle activities, when compared to average HR organizations. Max Caldwell, principal and leader of the People & HR Transformation Practice at The Hackett Group, argues that organizations are increasingly leaning on tools, technologies, and strategic partners who can enable them to operate more efficiently and at lower cost. He says, “We’ve reached an inflection point where world-class HR organizations are moving beyond exploration and adopting new technology and analytics tools to become leaner, smarter and more customer focused. It’s the next chapter in transforming HR to operate as a true strategic partner to the business.”

Online Payroll

Following on the point made above, payroll is one area where organizations are leveraging technology and vendors to gain efficiencies. Payroll processing is an incredibly valuable service that can relieve employers of a critical but time-consuming task that covers payroll administration, withholding and filing payroll taxes, payroll reporting, and much more. That’s why it’s one of the most commonly outsourced HR activities. But the real advantage comes from web-based, online payroll, which allows both employers and employees to view and manage payroll through self-service portals, including with mobile access. It also automates many payroll elements. The combination of that automation and self-service allows employers to deliver greater service to their workers with less overhead.

Embracing Digital Transformation

Many employers realize that changes are needed in the way they handle their workforce management. That likely means they need to incorporate technology in a way they haven’t before, even if they’re not quite sure exactly what to do or how to do it. KPMG’s new “Future of HR 2019” study found that 70% of HR executives see a need for digital workforce transformation, but only about half that number have a plan in place or feel confident about their ability to undergo this transformation. As a result, many employers are looking to partners for guidance and help, with most survey respondents planning on investments in predictive analytics and automation technologies within the next two years.

CoAdvantage, one of the nation’s largest Professional Employer Organizations (PEOs), helps small to mid-sized companies with HR administration, benefits, payroll, and compliance. To learn more about our ability to create a strategic HR function in your business that drives business growth potential, contact us today.