HR Outsourcing

Optimize sourcing to save.

To deliver HR services in a cost-effective way, you rely on a complex ecosystem of internal and external partners. But how can you ensure you have an optimal delivery model and receive best-in-class services at market-leading prices from your service providers?

As leaders in the market, ISG has the expertise you need to identify services that are suitable for outsourcing and the ideal short list of providers based on your needs. We can provide a full picture of providers’ capabilities, strengths and weaknesses.

ISG is a pioneer in sourcing and optimizing HR outsourcing relationships. With our unparalleled data and experience, we can help you select and negotiate with outsourcing partner(s) for global/domestic payroll, benefits administration, recruitment process outsourcing (RPO), learning and employee development, and employee data management.

Bridging technology and HR domain/process expertise, ISG can also work with you to design and outsource an HR service center and ongoing HR technology application maintenance services (AMS).

The HR technology and services market is continuously evolving. Don’t forget to reach out to an ISG advisor for renewal negotiations or benchmarks to ensure your HR service providers are keeping up with the rapid rate of change in the market.

Sourcing Assessment and Financial Business Case: Leveraging our proprietary market data, ISG can help you understand where outsourcing can optimize your delivery model (including cost, capability and quality).

HR Service Provider Selection and Negotiations: ISG knows the provider market and has extensive market data on pricing, service levels, and contract terms to ensure you choose and contract wisely.

Renewal Strategies and Benchmarking: Achieve optimal savings and service improvement by benchmarking your outsourcing agreements at least 18-24 months before your term end date.

Service Provider Governance: ISG uses best-practice organizational structure, processes and technology to support the management of your outsourcing agreements and relationships.

How Benefit Platforms Can Drive Employee Well-Being

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Benefits have traditionally been and continue to be complex and confusing for employees. In many cases, employees must search and dig for information that may be relevant to them. It’s a well-known example of the frustration employees often feel with HR processes.

This year has brought an increased focus on the well-being of employees – including physical, mental and financial health. And today some tech-forward benefit providers are simplifying the benefit experience by giving employees easy-to-access resources at the right time throughout the year. Benefit providers are using solutions with AI, machine learning and data analysis to offer employees increased access to health and wellness resources during the pandemic and beyond.

How Can a Benefit Platform Promote an Employee’s Overall Well-being?

Benefits platforms collect both employee data and supplier data to make recommendations to an employee. As an employee walks through an open enrollment process or a 401(k) election, for example, a benefit platform can make suggestions based on metrics tied to quality and cost of the offering. Some platforms are intentionally very easy to use, with complex data (think billions of data points) driving results calculated on the back end. Others use smart chatbots to help employees navigate their benefits options or collect employee preferences for a more personalized experience.

Promoting Physical, Financial and Mental Wellness

Going beyond standard support tools, health and welfare solution providers are offering solutions that refer employees to high-quality primary care or specialist physicians. Defined contribution (DC) providers that act as fiduciaries can make recommendations for investments, and DC platforms with automatic enrollment in qualified default investment alternatives can start employees on the path to greater financial security during retirement. Both DC and defined benefit platforms can include financial forecasting with future income projections that include an employee’s specific data related to retirement age and social security.

Improving Customer Experience and Reducing Frustration

Retirement providers are investing heavily in customer engagement and using technology to create a smarter, less frustrating experience. Some providers are working to eliminate complex terminology to make the experience more accessible. Platforms that provide a holistic financial wellness approach are offering enhancements such as behavior-based advice meant to help employees get a better sense of their personal and household savings. Decision support tools help achieve better outcomes in employee financial wellness and give users a more dynamic and personalized experience based on their activities and interests. Customized recommendations can have a direct correlation to employees’ well-being and ability to reduce stress and uncertainty.

Data sets that feed health and welfare recommendations might include a range of information, including physician surgery rates, infection rates, volume of procedures, compliance, specialist referrals, ER visits, and brand drug rates. Employee data captured can include salary, demographics, paid time off, 401(k) loans taken out, all of which drive the analytics behind a platform’s guidance. Understanding an employee’s motivation can increase program utilization.

Real-life Impact of Benefits Platforms

Do companies have confidence that these platforms have true results? One provider has shared that it has seen a 10 percent increase in employee engagement, with an opt-out rate of less than 5 percent. A large healthcare organization implementing this type of integrated health and well-being solution eliminated multiple vendors and streamlined its administration, which simplified the employee experience and increased engagement across all programs. Metrics like hospital admission were lower and preventative care screenings were higher, which resulted in medical cost savings and decreased inpatient numbers.

These outcomes equate to a high return on investment for the employer that deploys these tools. Some providers are putting their money where their mouth is and attaching a guaranteed return on investment to boost employer confidence in the solutions and make it easier to add the complementary services to their core benefits platform. 

A benefit provider’s use of data-driven AI can promote personal well-being, both emotionally and financially, by saving health care costs, recommending quality physicians, and helping an employee with financial investments for their future. It also increases well-being by reducing frustration in the HR processes themselves. One provider shared its research that showed employees are 2.5 times more likely to indicate positive wellbeing if resources are easy to access. Seems like a win/win for employers and employees.

Is your HR organization looking at benefits solutions? Contact us to discuss how ISG can help you develop a benefits strategy that can maximize your employees’ well-being.

About the authors

Jenni Cornwall is a Senior Consultant for ISG and brings 20 years of experience to the HR BPO industry. Coming from an actuarial background, her expertise includes service delivery assessment, benchmarking, strategy development and service provider evaluation and selection. Jenni maintains the database of ISG’s HR, HCM, ERP and Benefits Mark-to-Market® data for benchmarking.

Heidi Lumbrezer is a Director in HR Technology and Delivery Strategies for ISG and brings 20 years of experience in the benefits industry. She and has worked with clients of all sizes, with a focus large and complex organizations, her expertise includes benchmarking, strategy development and service provider evaluation and selection, helping clients make a case for change and maximizing cost and efficiencies as a result. Heidi maintains the ISG service provider profiles adding to her expert knowledge of HR/benefits outsourcing delivery best practice, market trends and services in the market.

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