Companies are not fully realising the anticipated benefits of HR outsourcing and shared services, according to a study by HROA Europe, SharedXpertise forums and outsourcing advisers TPI.

In the respondents, senior HR management across more than 40 major international corporations, 80% said the transfer of process-driven HR activities to an outsourcing provider or centralised, in-house delivery centre can play a key role in improving HR’s strategic focus. However, only 56% have achieved this benefit in practice.

Deborah Kops, head of program planning and development at SharedXpertise Forums, says: “These findings reveal a story of missed goals and opportunities. The widespread failure to achieve a more strategic focus is particularly worrying given the assumption that moving up the value chain is a natural result of HR process transformation. Unfortunately, many companies still assume successful HR transformation is a simple matter of lifting and shifting certain processes out of the HR department, rather than fundamentally altering the way in which HR contributes to the business.”

In most other respects the study reveals HR outsourcing and shared services as delivering significant benefits, albeit not as much as anticipated. It found the average cost saving is 20%, whilst quality of service typically improves by some 28%. Productivity improvement averages 23%.