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Exclusive: Costs are the top priority for HR professionals

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Costs and budget have become the main priority of HR, taking precedent over strategy, recruitment, retention, motivation and training, according to a snapshot survey of HR magazine readers.

Seven out of 10 HR professionals who responded to our survey have been asked to consolidate and streamline their HR administration this year in a bid to cut costs.

Respondents claimed outsourcing is a key way to save HR costs (35%), allow HR departments more time to plan strategy (33%) and improve efficiency (24%).

The findings revealed employment law to be the most popular area for outsourcing, with two thirds of respondents citing this. Recruitment came next, with 40% of HR employees mentioning this, followed by training (33%), information support (23%) and on site consulting (17%).

"The need to control costs and have certainty over legal spend budget has never been more important," said Peter Byrne, director of Employment Services Partnership, who believes fixed fee legal support will become more popular as a result.

"It is a growing solution that many professional HR and Legal departments are considering – especially in these tough post budget trading conditions."

The findings come as a report from KPMG suggests that chief information officers (CIOs) worldwide plan to squeeze more value from their outsourcing arrangements. The report, From Cost to Value, says that CIOs are putting value for money as their top priority. However, they also see outsourcing as a way of helping to transform the business in terms of innovation and productivity.

According to Bryan Cruickshank, a partner with KPMG Advisory in the UK, CIOs unanimously put people as the most important component in creating value. 

"Successful IT value creation needs to integrate and align the organisation’s technology, people and processes. One of the major potential pitfalls is the inability of many organisations to find suitably skilled people to take this forward. Often, precious time to create value is lost as organisations embark on ambitious projects with the wrong people at the helm."

With years of austerity predicted ahead following Chancellor George Osborne’s emergency budget earlier this week, there has been increased emphasis on the possibility of achieving efficiencies and cost savings through outsourcing, with the share prices of outsourcing firms including Serco and Capita rising on the stock market.

However, according to the National Outsourcing Association’s latest quarterly Outsourcing Confidence Index, three quarters of respondents do not believe supplier capability had improved in the past 12 months and those who outsource want to see lower costs and more transparent pricing, greater service flexibility and improved ability to access specialist personnel.