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March 25, 2008

 

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January 6, 2006

 

EOSē HRO Platform

Designed for larger employers, our HRO platform provides end-to-end HR administration with minimal operational change. Under this platform, all HR administrative functions including new hire onboarding, benefit communication, benefit and payroll administration, and compliance management are provided under a management contract using your existing benefits vendors.

Based in Birmingham, we offer employers with 500 to 10,000 employees an extremely attractive cost structure for HR administration without compromising any service delivery. Our HR consultants and managers have a depth of HR process and management experience having previously worked with major corporations such as Bellsouth, Oracle, and Tyson Foods.

Evaluating HRO

Consider the operational functions your organization currently outsources. A financial and operational business case was made and accepted for outsourcing each of these functions. The challenge with developing a business case for HRO is that most organizations have a very blurred view of the costs associated with HR administration and compliance, and the potential value of having internal HR resources focused on human capital management, i.e. recruiting, training and developing talent.

Companies are recognizing today that human capital is their competitive differentiator. Though marginal gains will still occur, the days of investing in information technology to gain a significant competitive advantage are over. The greatest competitive advantage is the quality of your people, your "A" players. Consider how many "A" players you have today. Is it 20%, 10%, or maybe 5% of your workforce? What if your current HR efforts could be singularly focused on one task: hiring and developing "A" players? What if you had an Employer Operating System that allowed your internal HR staff to focus on maximizing your number of "A" players?

Now imagine for a moment if you doubled your "A" players. How would that impact your business? By what percentage would top line revenue increase? Would operational efficiency improve? Would profitability per employee increase? Could doubling your number of "A" players increase total productivity by 5%? If so, what is that worth?

If you believe your employees are your most important asset, and that they truly represent a competitive differentiator in your market, then we believe we offer a solution that can dramatically enhance their value to your core business and thus enhance the shareholder value of your company.

Getting to the Bottom Line

Ultimately it comes down to who can process transactions more efficiently, your internal resources, or amsource's EOS². The following chart shows the typical transaction volume for employers based on the number of employees:

Annual Employer Transactions

Number of employees

  500 1,000 5,000
  Metrics per employee      

Average salary/wage

$25,000 $12,500,000 $25,000,000 $125,000,000

Pay checks (52 pay periods)

26 13,000 26,000 260,000

Employment and Benefit Documents

20 10,000 20,000 100,000

Average Employee Deductions

3 39,000 78,000 780,000

Employee Transactions- payroll changes, benefits changes, employee status changes

0.80 400 800 4,000

Average FTE's to administer

0.01 5 10 50

Your transaction volume may vary, but what would be the efficiency gains if you could eliminate the "one-to-many" vendor relationships you currently have with your benefits providers to one vendor, and reduce the transaction volume to one per pay period? Apparently, a number of leading corporations believe there are efficiencies to be gained from a single vendor platform. The chart below, from a recent CFO Magazine cover story on human capital, shows the top HRO deals from 2005. Note that DuPont Chemical's 13-year deal, including 90,000 retirees, averaged $525 per year, per employee/retiree. Do you really know what the "back-office" of your HR department is costing? Do you believe it could really be more efficient, per employee, than the companies listed below?

Top HR Outsourcing Deals in 2005

Company

Length of Agreement
(Years)

Total Contract Value
($ Millions)

Employees Served

Outsource Vendor

DuPont

13

$1,100

161,000**

Convergys

PepsiCo

10

$600

102,000

Hewitt Associates

BT Group

10

$575

277,000**

Accenture

Marriott International

7

$350

128,000

Hewitt Associates

Wachovia

7

NA

90,000

Hewitt Associates

Dana

10

NA

70,000

IBM Global Services

Duke Energy

7.5

NA

21,500

Hewitt Associates

Whirlpool

10

NA

82,000**

Convergys

Thompson

5

NA

28,000

Hewitt Associates

NiSource

10

$1,600*

8,628

IBM Global Services

*Includes IT outsourcing services
**Includes retirees
Sources: Everest Institute; various reports and estimates

If you're in charge of evaluating HRO, click here, we have a special opportunity for you to evaluate amsource.