Why HR outsourcing continues to expand : Successful companies excel by focusing on what they do best

Purpose – To highlight that human‐resource outsourcing (HRO) arrangements have proved to be strategic partnerships that help to put people matters at the top of corporate strategic decision‐making. Design/methodology/approach – On the basis of a survey by The Conference Board, produced in partnership with Accenture HR Services, the article demonstrates the key motivating factors in the decision to outsource. The article presents a case study of a mid‐size American chemical producer that, because of human resource outsourcing (HRO), can now more effectively perform financial analyses because of better HR reporting. Additionally, the company now pays 99 percent of employee claims within two weeks and manages every service request within 48 hours. Findings – The article demonstrates that HRO is about the best use of company resources, not a means for cost savings or job cutting. By fully understanding the economics and opportunities of HRO, executives can help their companies to achieve new heights of performance. Practical implications – The article demonstrates that the key advantages of HRO include lower costs, better insights, greater control over the HR function and improved customer services. Originality/value – The article contains plenty to interest top managers who are considering outsourcing their HR functions.