Pros of HR Outsourcing

Business Process Outsourcing has become new mantra in the corporate business world, and thus Human Resource Outsourcing (HRO) is slowly becoming the new buzzword.

In order to utilize the true worth of the employees to its fullest, one must outsource the non-core activities of the organization. The awareness of this has already been realized by the organizations. 

Outsourcing has no longer the privilege of only huge multinational organizations. Even the public sector and government undertakings as well medium size or start-up companies are also in the race of outsourcing their many HR related activities.

In today’s business environment, competition is very much apparent in any industry you encounter. One way your company can survive the competition is to focus on core operations, take care of customers and driving growth instead – this is important so your company can set aside cost savings into the company “war chest” for future use in revenue-generating activities and programs.

If you’re having trouble managing your HR department, you might need to start considering outsourcing as a better choice for solving the issues that your staff can’t handle. If you’d like to start focusing on your core business, consider outsourcing of HR functions to business process outsourcing (BPO). 

Outsourcing service providers can perform all the HR functions from managing payroll and processing benefits, to recruiting, training and more. Some companies even outsource various areas of HR that demand risk management because they need constant updates and knowledge of the risks that a company could potentially face. 

Apart from performing basic HR functions efficiently, there are several other reasons why HR outsourcing is important. 

How Your Company Benefits When HR Department is Outsourced?

• Reaps Cost Savings: The HR department of any company can be quite expensive to maintain because of its various functions. When your HR department is outsourced, that means your company will expenses some HR staff expenses. Things such as soaring salaries and costly benefits will be the least of your worries.

• Staffing Core Functions as a Priority: Your company can choose to cut the HR department down to a level that will help the company add more focus to staff core functions.

• Manage Payroll Smoothly: Paying your employees will get easier because this function can be separated from the managerial functions of observing employee relations and dealing with issues among rank-and-file. The Payroll and Accounting system will proceed smoothly for the good of the entire company so that there are no delays in paying employees.

• Delegate Non-core Tasks: Recruitment and training are arguably the most arduous tasks in HR management. Finding the right person for the job and inducting them into your company culture takes the kind of time and energy many SMEs cannot afford to dedicate. Yet, these businesses have the greatest need for the right employees to move the business along its growth trajectory.

Leaving this responsibility to an external agency allows you to benefit from their recruitment model, experience, and even connections/networks. They can furnish you with the right fit much faster than you could yourself, which allows less downtime, and facilitate training to hasten transitions between old employees and new ones.

When employee hiring and training is outsourced, managers and other professionals will be able to concentrate on ways to raise revenues for the company instead of getting sidetracked into routine administrative functions.

• Keep your company lean: The leaner the company the more capable to compete better in an industry against the giants if it outsources. This is because your lean companies will be able to snatch business opportunities as a more nimble and flexible organization.

• End-to-end Service with Enabled Technology: Professional HR outsourcing firms are equipped with technology to offer end-to-end outsourcing and recruitment services that can support your business such as automated payment solutions, digital hiring cycle and Onboarding.

• Provides Customized Solutions: Employee requirements differ from business to business. So, outsourcing HR functions to a professional vendor helps to get customized solutions that match your HR requirements. They also offer other benefits like reduced operational cost, better focus on company’s objectives, better administration and so on.

• Employee Relations and Conflict Resolution: The Outsourced HR agency can be responsible for resolving conflicts and disputes between employees. These meetings can take up a chunk of time, a valuable resource for any HR running a small business. Depending on the nature of conflict, things can get even more complex (e.g., when there’s conflict between a boss and their subordinate).

An outsourced HR team doesn’t interact with said employees from day to day, and therefore they are able to hear cases impartially and come to swift resolutions of conflicts. Where the HR sits with other employees, especially in an SME set up, it becomes more difficult for them to put aside biases from professional relationships or friendships with coworkers.

Access to new technology, ensuring risk management and compliance, and reducing operating costs should be the principal market drivers for a company that chooses to outsource. While selecting a HR BPO, it is important to ensure that your professional vendor has a proven track record, the service level required, flexible contracting, previous experience and grade of specialization.

Are you searching for outsourcing your HR Department?

If you are looking to outsource your HR department, contact us at Talenta Group. The model for our HR services is built on personalized attention, timely delivery, affordability and superior quality. We offer a range of HR Services including talent acquisition, building organizational capability, HR Consulting and more.