According to Ceridian (2007), specialist knowledge will be possessed by the third party providers and also they will be having access to the software that will be helpful in revamping the package. In the process of outsourcing, benefits messages that the employers send to staff can be optimised with out creating any kind of hassles in the back office.
The HR based employees can be released from their daily duties through outsourcing which will also bring the additional benefits of cost savings and enabling the employees to concentrate on other areas.
According to Steve Herbert, after the global economic recession the cost savings has become a top priority for all the organisations. ...view middle of the document...
The performance of an organisation can be improved by maintaining its relation with providers. They have to maintain good level of relationship because there is a chance of organisation being far from the benefits strategy.
If the providers are well aware of the organisation’s culture then they can provide effective package of benefits. The provider should possess good communication skills as they should regularly interact with different department staffs in the organisation.
The package should be well branded with appropriate use of logos and colours. The providers have to spend a lot of time with the staff. According to Robertson, the providers should agree for a communication plan and have to be aware of the strategy which works for the current scenario in the organisation.
In the issues pertaining to the benefits provision, outsourcing is not an overnight solution. For achieving effectiveness in the benefits package by the process of outsourcing, organisations have to spend a lot of time in selecting the right providers.
• Head count Reduction: According to Benefex, in an organisation comprising of 800 to 1250 Employees, if a benefits scheme characterised by its flexibility is outsourced a full time employee in an organisation can be reduced in an organisation.
• According to Benefex, the compliance and processing costs can be reduced by 35% due to outsourcing.
• According to the Thomas Online Benefits Survey (2009), 28% of the 530 respondents told that the main issue in the benefits administration is the increasing burden on the organisational resources. Among the respondents, 33% of them reported that the main issue is administrative efficiency of the benefit providers.
• Savings for the staff: According to the Thomas Online Benefits Survey (2009), 70% of the employees are not clear about the spendings on the staff savings.
• According to Pay in IT 2008 report, there was increase in salaries at the mid level jobs over the past few years. For the technicians of IT user support the salaries are increased by 15% to £25,239 and for the systems engineers the increase is up to 12% by £31,369.
• Offshoring the IT Jobs to the countries like China and India are reducing the availability of graduate opportunities.
• According to Mulkearn, in the mid level of IT support, the sizeable pay is increasing and there is some shortage of skills possessed by the technical staff.
• The salaries of data providers are increased by 25% starting form the year 2003 to £ 47,790.
• Recently, the IT recruiters have found that more than 90% of the IT employees are searching for lucrative opportunities.
Effect of Outsourcing on Costs
2004 - 2008
cost savings Achieved 51% 51
Incurred costs 39 30
Costs remained same 16 25
Note: The Table is...