Q: - We hear much about Human Resources Management Business Process Outsourcing (HR BPO) today. Just what is HR BPO?
ER: - When someone talks about HR BPO, it’s important to ask what they mean. The potential scope of services covers a spectrum from the more traditional payroll processing and benefits administration to complete HR function management by third-party providers.

Q: - What about the providers of HR BPO? Who are they and what are the differences among them?
ER: - The market is fragmented, but evolving very rapidly. Currently, there are two basic types of providers of HR BPO. They are the vertical providers and the full scope providers. Verticals are the providers of services like training, recruiting, employee relocation, payroll processing and benefits administration. These firms are evolving from traditional human resource management consulting organizations and providers of other HR services like staffing companies. Full-scope providers are capable of taking over the whole function. Most of these providers have their roots in information technology outsourcing and have either acquired or are building an HR BPO capability.

Q: - What is one of the major trends in HR BPO?
ER: - The trend among global companies is to bundle HR BPO along with IT, Finance and Accounting, Procurement and other non-core “back-office” functions. Generally, full-scope HR BPO providers fit one of two profiles. Many providers are attempting to directly provide all human resource management-related services, subcontracting out only when absolutely necessary. Others have opted for the “general contractor” model. These firms may have one or two areas of vertical expertise in which they are committed to staying “world class”, while subcontracting out others. We believe the “general contractor” (GC) will be the prevailing model. By remaining largely provider and solution “agnostic”, the GC has the flexibility to ensure its customers will have the best available products and services at the lowest possible cost.

Q: - What about HR BPO advisors? Why are they necessary? What is their role?
ER: - Currently, there is so much demand in the market that most providers are overwhelmed with RFPs. Few providers have the capability of assisting corporations with the determination of what components of the HR function could and should be outsourced. Defining necessary outcomes, desired service levels and contract governance components are all critical to creating an RFP that gets a provider’s full attention. Additionally, provider selection and the subsequent negotiation are both places where the experienced HR BPO advisor can bring tremendous value.