Outsourcing of HR often leads to cost savings, since the standard process overheads are being spread across multiple clients.
An HR Outsourcing Association's report (Are You Ready for RPO?) highlights one specific cost saving area by commenting that, "RPO is the most efficient and cost-effective way to conduct talent acquisition." However, the report also warns against viewing recruitment process outsourcing solely in cost terms. "If you do, you will only be doing basic talent acquisition and won't find the quality of people you are looking for." If the only motivator is budgetary, "then you are bound to run into stresses between the outsourcer and the employee," says the Hackett Group's Stephen Joyce.
Indeed, more and more outsourcing (and HR shared services and offshoring) is being driven by potential service quality improvements as well as cost-cutting.