EquaTerra, Outsourcing, HR, SLA

How to Design and Tailor Effective SLAs for HR Outsourcing

Service Level Agreements (SLAs) are an important and ubiquitous tool to manage any outsourcing relationship. It is imperative, however, that buyers tailor SLAs to the goals and requirements of specific outsourcing efforts. SLAs are far from a “one-size-fits-all” governance tool. Relative to human resources outsourcing (HRO), this means developing SLAs specific to the process areas outsourced (e.g., payroll, benefits administration) and ensuring performance and costs are tracked at an appropriate level, typically the sub-process level. Buyers must tailor SLA programs to support the intent of the HRO deal (cost reduction, process improvement, etc.) and ensure they drive – as a component in the overall outsourcing management and governance program – service provider performance in the desired direction. Finally, buyers must use caution when comparing or benchmarking SLAs across organizations, or even business units within the same organization, given the inherent challenges in normalizing results for different HR operating models and processes to avoid “apples to oranges” comparisons.

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Source: EquaTerra