HR Outsourcing: Typical Service Level Agreements

A service level agreement (SLA) is a contract between the firm and HR service provider specifying what services will be delivered, their quality, and frequency. It also details what the customer must do to ensure services received are of the requisite quality and timeliness. This will be monitored by a series of performance metrics or key performance indicators.

An HR SLA identifies the services that will be provided to an organization or department in an outsourced setting. The objective is to ensure that the delivered service meets the needs of the customer. The HR SLA identifies customer expectations and defines the boundaries of the service, stating agreed-upon service level goals, operating practices, and reporting policies.

A typical HR SLA contains the following:

Category Criteria Minimum Acceptable Service Level
Data Accessibility (Applies to HRMS, benefits administration, pension administration, self-service, and payroll) Percentage of times that data and system are available for use during scheduled uptimes. Planned outages (system administration) as specified under functionality requirements, do not affect availability. 24x7x365 95% in 2 hours100% in 4 hours99.9%
Data Application (Applies to HRMS, benefits administration, pension administration, self-service, and payroll)

1) Backups must complete successfully 100% of the time

2) Application trouble call resolution

3) Application updates

1) 100% of the time

2) 24x7x36595% within 2 hours99% within 6 hours

3) Must provide full version upgrades including significant feature/functionality enhancements and employing the latest technology available in the marketplace with no additional charge.
Transaction Response Time (Applies to HRMS, benefits administration, pension administration, self-service, and payroll) Length of time host systems and networks transmit and process requests and returned data to user's screens 6 a.m. to 9 p.m. Monday thru Friday95% within 5 seconds100% within 10 secondsWeekends matching response time
Software/Hardware Trouble Resolution (Applies to HRMS, benefits administration, pension administration, self-service, and payroll) Time elapsed between initial trouble call and time software is restored. 24x7x36595% within 2 hours100% within 4 hours
Data File Restoration (Applies to HRMS, benefits administration, pension administration, self-service, and payroll) Length of time to restore files from the time of request until data is available 24x7x36595% within 4 hours100% in 6 hours
Self-Service Kiosk, PC, access, telephoneTraining/orientation 24x7x365Quality, timely, and customized processing according to requirements
Insight:
For more information about Offshore Outsourcing, see Offshore Outsourcing: Business Models, ROI and Best Practices.
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