A business should thoroughly understand the benefits of outsourcing and ensure that the outsourcer is the right fit for the job that needs to be done. In other words, the outsourcer should be compatible with your request (having specialists in the area of your needs).

As stated by AllBusiness. com when thinking of outsourcing, “one should keep in mind that a Human Resources firm is an extension of your company culture, so try to find one that fits your image. “4 A Human Resource firm that mainly works with law firms and financial institutions would not be suitable fit for a young, progressive business.Therefore, it is important that firms research the company that will do their outsourcing.

There are several companies that market themselves as outsourcers and finding the right fit can be a task. However, we have found AON to be an outstanding outsourcer of benefits. AON’s success as a company and with its clients is further discussed below. AON AON is a Risk Management Reinsurance Human Capital consulting firm, providing outsourcing services in specialized areas for many companies.AON provides services such as employee benefits outsourcing, risk management, insurance brokerage, human capital, specialty insurance consulting and management consulting.

AON has a diversified workforce with 46,000 employees working in 500 offices in more than 120 countries. According to AON, “its core value is maintaining a client focus. ” AON has been very successful as they are able to distinguish the specific needs of their clientele. AON has provided outsourcing services for a diverse list of clientele such as the following. Fortunately for AT; T and AON the disadvantages listed above did not occur in their outsourcing partnership.

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These types of disadvantages and problems occur when companies fail to find an outsourcer that is the right fit. However, AT;T found a good fit with AON as according to HRO magazine, “Aon Consulting was one of several partners considered for the outsourcing assignment. Initially, six vendors vied for the opportunity, but Aon’s global infrastructure, reputation in the consulting and administrative fields and its willingness to offer AT&T employees new career opportunities won the job. “The solutions chosen by AON and their implementation resulted in great success for AT ; T.According to a study by the Gartner Group, “companies considering HR business process outsourcing should examine AT & T’s experience with AON’s Human resource outsourcing experts and build on the inherent success factors of this outsourcing relationship. “6 Therefore, businesses that decide to outsource benefits should adopt similar programs used by AON. The solutions provided by AON encompassed the following. In terms of benefit plans, AON offers both defined benefit plan management and defined contribution plan management to its clients.

However, AON advised AT ; T to move from the traditional defined benefit plan to adopt a defined contribution plan for its employees. Defined contribution plans encourage employees to save money for retirement. Defined contribution plans empower employees to make contributions into their retirement accounts. With defined contribution plans employers are not required to make contributions as it is the responsibility of the employee to make contributions. However, AON has advised AT ; T to help encourage employees to make contributions by matching an undisclosed amount to employee contributions.

Before AON implemented the defined contribution plan they carefully studied all of AT ; T’s employee groups such as salaried, hourly and highly compensated employees, to ensure that the plan met the requirements of everyone. AON makes it very clear that the communication of the plan is essential and AON customized a strategy for AT & T to properly communicate the new plan to all of its employees. AON provides professional recordkeeping for AT & T and ensures that all records are up-to-date. AT & T employees are also able to be more responsible and track their savings and investment performance against their personal financial objectives.

AON advised AT & T to implement a Consumer Driven Healthcare (CDH) plan along with its current health insurance program. CDH’s help companies to maintain control over healthcare costs and they allow employees to make greater choices about healthcare. According to AON, Consumer Driven Healthcare plans represent a fundamental shift in the way employers will deliver healthcare in the future. “7 CDH plans have flexible spending accounts, health reimbursement arrangements and they have higher deductibles.Employees who are young and healthy benefit from CDH plans. Employees who are very sick also benefit from CDH plans as the high deductible may cover more than they would have to pay in doctor fees. AT & T has definitely gained from implementing the CDH as there is better control of health costs and the majority of employees prefer these plans. Healthcare costs for employers are rising on an annual basis.

According to the U. S Chamber of Commerce Employee Benefits Survey 2003, medical and medically related payments by employers constituted 15.2 % of payroll. Healthcare costs have also been high for AT & T and as a result AON advised AT & T to implement a health management program.

This health management program encompasses health promotion, wellness, disease management and care management. Through the healthcare management program AT & T’s employees focus more on any health issues and prevention of stress and diseases. This has resulted in great success for AT & T not only in reduction of healthcare costs but less absenteeism of employees and increased productivity.