One year into a new outsourcing arrangement that has helped pare the size of the internal human-resources department at Prudential Financial Inc., the HR budget at the Newark, N.J.-based company has dropped by about $25 million, says HR vice president Rob Tomaino. Although the department had undergone budget cuts and streamlining, Mr. Tomaino says, "We knew there was still more we could do," and that was when the company started thinking about outsourcing. HR decided it would keep control of strategy, policy and leadership roles, but anything transactional or administrative -- payroll, benefits, employee data management, call centers, HRIS support, even training -- would be outsourced to Exult, an Irvine, Calif.-based provider. Guaranteed cost savings were built into the contract and Exult bears a financial risk for not meeting monthly performance metrics for each function. The entire transition took about eight months, and the company is now about four months past the transition point. "The last four months have been terrific," Mr. Tomaino says. An added advantage to outsourcing: Exult assumed responsibility for HR’s other third-party vendor contracts and can either renegotiate them or move them to preferred providers. "If they save us $1 million, we split the savings," Mr. Tomaino says. "So it’s a win-win proposition. It gets us more than we could have gotten on our own." Many Professionals Just Strive to Get By Are personal standards getting lower or are work demands getting higher? This question comes to mind as many employees say their primary objectives for work are simply showing up and meeting basic expectations. According to the latest StressPulse survey from ComPsych Corp., a Chicago-based employee-assistance program provider, 26% of workers cited "being present" as their most important work priority and 62% cited "accomplishing basic responsibilities" as their top objective. The third choice in the survey, improving work performance, was selected by only 12% of respondents. Almost half of those surveyed said they have high levels of stress, characterized by extreme fatigue and lack of control. Workload was most commonly cited as the top cause of stress. If employees are distracted, tired or ill, the company’s productivity and bottom line can suffer, says Richard Chaifetz, chief executive officer of ComPsych. "You should use whatever means possible to encourage and support your existing work force, whether it is recognition, training and personal development or an employee-assistance program," he says. Manufacturers Fear Labor Crisis Even as manufacturers began laying off thousands of staffers because of the economic downturn, they were facing a shortage of workers with strong qualifications. In the absence of corrective action, this shortage will intensify in the coming years as increasing numbers of baby boomers exit the work force, according to a new report from the National Association of Manufacturers. Projecting forward to 2020, the report says there will be 10 million unfilled skilled positions in U.S. manufacturing, a sector in which average pay -- $54,000 in 2000 -- is already 20% above the U.S. norm. Part of the industry’s difficulty with attracting workers is an image problem, according to the report, which cites negative perceptions among students, current labor-force participants, and others. "Unless the industry finds a compelling way to communicate a positive image and address education and training issues effectively, manufacturing could experience a shift from merely having a talent shortage to facing a serious labor crisis," the report says. <