European companies divided about outsourcing HR
Automation of HR processes is outsourced most frequently
February 23, 2021
European companies have different views on whether to outsource more or fewer HR projects in light of the coronavirus crisis. While roughly one in three say they are prepared to take on a greater share of their HR tasks internally, more than a quarter (27%) want to do the opposite and call on an external partner more often. This is the striking split that has come to light thanks to a European survey conducted by HR and payroll specialist SD Worx.
The decision regarding whether or not to outsource HR tasks has a very different outcome in countries throughout Europe – even among neighbouring ones. In Germany (40%), Switzerland (37%), Austria (36%) and Belgium (35%), almost four in ten companies want to outsource their HR activities. In contrast, just two out of ten companies want to outsource their HR tasks in countries such as Poland (17%), Ireland (23%), Italy (19%) and Spain (16%).
Of the eleven countries surveyed, 27 percent of companies on average have no plans to reduce the amount of HR tasks they are outsourcing, while 34 percent indicated they intend to take on more HR tasks internally.
“This proves that the coronavirus crisis has spurred HR departments around Europe into action, too,” states Tom Saeys, Director Operations & Shared Services at SD Worx. “While some swear by outsourcing (part of) their HR tasks and may wish to increase this in order to focus more on their core activities, other companies are keeping more HR tasks in house and redistributing them to existing, permanently employed HR professionals. Even so, outsourcing is able to guarantee the continuity of a company's payroll. What's more, HR is playing an increasingly important role, strategically speaking. HR technology is also evolving at a rapid pace, making it possible to work more efficiently, acquire data-based insights and improve relationships with employees.”
To put these figures into context more effectively, SD Worx also examined which HR tasks companies most prefer to (partially) outsource and which duties do not require as much external assistance. Companies generally prefer to outsource the automation of HR processes, social legislation and digital transformation. Swiss companies, on the other hand, prefer to outsource recruitment.
The difference between technology and consulting
The software component associated with these tasks is often the reason why companies go to a specialist. They primarily want to receive consulting support when it comes to social legislation. Learning, well-being and answering HR-related questions from employees are, according to European companies, the tasks that are least likely to be outsourced.
“Many companies primarily outsource technology-based HR. They tend to take on tasks related to consulting and human contact internally. In most countries, one in three companies entrusts at least part of its HR duties to an external partner. This percentage is even higher among major industrial companies. Payroll automation and digitalisation are the most frequently outsourced tasks. Against the backdrop of the coronavirus crisis, doing so gave many managers peace of mind last year. This is a textbook example of how outsourcing HR reduces the workload of our own people, guarantees continuity and offers employees the total package," states Tom Saeys in conclusion.