The Human Resources Outsourcing Association (HROA) has partnered with TPI, and the Information Services Group Inc. (ISG) to release the 2009 HROA Benchmark. The new report details the current trends and best practices in human resources outsourcing (HRO) and confirms the emergence of industry standards among large-market buyers.

The research examines the use of pricing methodologies, the depth and breadth of outsourced services, and the correlation of service level measurements and target levels with emerging industry standards. The respondents, a cross-industry sample of companies with multi-process HRO agreements in place and at least 15,000 employees, provided detailed information from existing contracts, including invoices, change orders, and statements of work, as well as real-life examples of performance targets and measurements.

Among the report’s findings are:

• Workforce administration, payroll and health & wellness benefits are the most frequently bundled services in a multi-process HRO agreement.

• Compensation is the most frequently included talent management process.

• Full-scale learning and recruitment process outsourcing were the least common processes outsourced.

This focus on core processes was found to align with the market's move to multi-sourcing versus the one-stop shop provider. Additionally, analysis of typical change order spend by process area and type of change proves instructive to companies looking to evaluate or estimate total outsourcing spend. On average, buyers should budget 10-15 percent of base fees for change order costs; however, this percentage varies by process and other factors such as level of M&A activity.

"The HROA Benchmark study provides valuable data to help organizations understand the intricacies of establishing and managing multi-process relationships," said Debora Card, TPI Associate Partner. "TPI was able to identify trends that are shaping this developing field of outsourcing, including analyzing how HRO buyers are handling some of the thorniest issues in these engagements. We think this report is a must-have for anyone looking to implement or improve HRO in their organization."

The study also demonstrates that best practices for effectively establishing and managing HRO relationships are beginning to emerge in the industry. Among the companies studied, a correlation of greater than 75 percent existed between actual experience and the HROA Recommended Practices for both pricing methodologies and service level methodologies and measurements.

"The HROA Benchmark validates that our Recommended Practices are indeed aligned with the experience of companies with large HRO engagements," said Richard Crespin, the HROA's Global Executive Director. "Outsourcing's value derives from the potential to provide repeatable products and services that are outside the core competency of clients. We are committed to helping develop industry standards that help ensure HRO is delivered efficiently and the needs of the client base are met."