HR outsourcing refers to the transfer of management and responsibilities of certain HR functions between an employer and a third-party provider. Over the past years, there has been an increase in popularity of HR outsourcing both locally and internationally.
Assume you are an online retailer. Perhaps you employ someone to keep your website and other IT infrastructure up to date. But if you want to create an app for customers, you’re more likely to outsource that work than asking your employees to learn how to create an app. In the end, it requires highly specialised skills, and the stakes are relatively high.
A similar statement can be made about HR processes. Even if you employ a full-time HR representative, a HR expert must possess an extensive understanding of many processes and regulations, a number of which have costly consequences if not controlled.
Outsourcing HR services has several significant advantages for an organisation. Below, the HR consultants from HR Team share the top 5 benefits of outsourced HR services:
Accessing HR expertise
Human resources are no longer purely transactional. HR has become increasingly complex, and as a result, it plays a greater role within organisations. In today’s organisations, the people function is responsible for all aspects of employee lifecycle management, including:
- HR technology
- HR operations
- Employment relations
- Compensation and benefits
- Performance management
- Payroll and tax administration
- Learning and development
Managing each of the above areas effectively and efficiently requires skill and knowledge. The good news is that HR outsourcing provides access to these experts.
To avoid costly claims and reputational damage, HR compliance issues must be proactively managed, as non-compliance can be catastrophic for businesses. The constant change and increasing complexity of regulations can make it difficult for employers to keep up with the changes. Having a HR outsourcing provider oversee your HR strategy can provide you with peace of mind.
Compliance is not the only HR issue that needs to be addressed. A company’s employer brand can be tarnished if it mistakenly discriminates against one of its employees, making it difficult to hire and retain the best talent. As well as being costly, it can also result in legal problems.
There are many HR aspects that can be sensitive and challenging, including grievances, disciplinaries, and dismissal. Having some support for these high-risk activities makes good business sense, and HR outsourcing can provide that support. The experienced consultants from HR Team can help businesses minimise these risks and become an employer of choice by navigating complex HR issues compliantly.
Reducing HR costs
For small and medium sized businesses, HR costs can be a substantial burden. Providing competitive employee benefits, learning and development solutions, and hiring the right talent can be expensive. In addition to these, compliance issues can come with hefty fines without an effective risk management strategy. HR outsourcing providers, such as HR Team, can manage the above in a cost-efficient way.
An efficient process is essential. Besides building strong teams, organisations must consider processes and systems. It’s no different when it comes to the people function, and many businesses suffer from HR-related inefficiencies.
Could you dedicate the time necessary to developing and continually improving all HR-related processes? How about selecting next-generation HR technology and maintaining it as needed? If the answer is no, you may want to explore working with a HR consultancy.
HR outsourcing providers can provide a range of HR-related business processes and systems to drive efficiency and performance in your organisation.
Takeaways to getting your HR outsourcing started
As discussed above, there are several advantages of HR outsourcing. The major ones are accessing HR expertise, minimising risks, increasing efficiency, and creating a win-win situation for both parties. If you are looking to outsource your HR functions, sign up with HR Team.