According to Towers Perrin, cost reduction was the top goal driving outsourcing of HR by 73 percent of the companies polled in 2009, but half of those polled said that improving HR service quality was a top goal.

Towers Perrin says the emergence of improving service quality (in the form of employees’ experience interacting with HR) as a strong driver of companies’ decisions to outsource was “surprising.” In 2009, 50 percent of those polled said improving HR service quality was a top goal of their outsourcing efforts — a jump from 33 percent in the 2008 study, Towers Perrin reports. Curtailing time-intensive administrative tasks that added minimal value also remained a top reason for outsourcing, with 73 percent of respondents listing “eliminating the distraction of administrative and transactional work” as a top priority for their HR outsourcing strategy.

Two-thirds of respondents said their outsourcing arrangements have achieved their desired overall cost savings; reductions in overall HR department head count contributed to this positive cost outcome, Towers Perrin says. In 2009, 93 percent of respondents reported a decrease in overall HR head count since implementing outsourcing and almost four in 10 reported head count decreases from 25 percent to 49 percent of HR staff, and nearly a quarter reported HR head count decreases of 50 percent or more, according to the survey results.