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Clients too optimistic about HR outsourcing savings

Data from more than 100 pan-European companies shows HR departments expect far greater cost savings from outsourcing than what they actually get.

Research by talent management consultancy Ochre House found companies expected outsourcing savings of 37%. In reality average savings were half of this - at 18%.
On setting up its outsourcing deal, Simon Patton, HR director of Somerfield said: "Price was, of course, a factor when we got to final negotiations but it wasn't the one that got us there in the first place. Efficiency, simplification and added value were the three areas we wanted to make real wins in. If you are focused purely on the bottom line you risk being disappointed."
None of the companies measured by Ochre House that rated their outsourcing as ‘successful' or ‘very successful' named cost saving as their main priority.
"In the current economic climate a lot of organisations seem to view outsourcing as the ‘magic bullet' that can help solve their financial problems overnight but they more often than not end up being disappointed," says Ochre House director Sue Brooks.