By Emmanuel Zvada
AS your business grows, so do your human resource responsibilities. Developing and restructuring your human resurces (HR) processes helps you take care of your employees, increase efficiencies and allows you to stay on top of rules and regulations as far as compliance is concerned. By outsourcing some of the more time-consuming HR tasks, companies free up their HR team members to focus on long-term goals and business growth.
Outsourcing makes it possible to shape a more specialised HR department that is able to actively participate in the advancement and development of the company without being burdened by time-consuming HR tasks.
HR outsourcing
When your business hires an external company to manage some or all of your HR needs, you are outsourcing HR. HR outsourcing can cover a broad spectrum of services, from day-to-day HR functions to long-term, strategic initiatives. Getting it right from the beginning is crucial especially for businesses.
Many companies trudge on without the aid of an HR manager or HR support services and the only viable option is to outsource HR services. You can outsource your company’s payroll processing, employee benefits administration, talent acquisition, or all of the above and more.
What impact do you think HR has on the rest of the organisation?
As a practice, businesses and organisations depend on many resources such as physical resources, financial resources and human capital, which are people. There is no doubt that people play a vital role in an organisation and hence there is need for HR department to make sure it governs the relationship between the organisation and its employees.
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Properly managing your human capital directly affects your company’s performance and revenue generation. It’s common practice in the HR domain to advise companies to treat their employees as well as — or even better than — they treat their customers. HR helps you stay in tune with your human capital requirements, which allows the business to prosper and grow.
What are the benefits of outsourcing HR activities?
An outsourced HR consultant can bring an objective opinion to the table, in addition to often being more cost effective than a full-time employee. Companies with specific HR requirements can outsource to consultants who specialise in those areas.
Developing and streamlining your HR processes helps you take care of your employees, increase efficiencies and productivity. In that regard, the main benefit of HR outsourcing is having access to professionals who possess knowledge about various employee benefit schemes, insurance options, market trends, etc. Although outsourcing HR might not be right for all businesses, there are some significant advantages in doing so, especially when it comes to saving time and money.
Outsourcing improves compliance
As a business owner, you may be wondering about the consequences of non-compliance. Unsurprisingly, there is a cost for non-compliance and that costs can only be reduced by outsourcing from the best so as to guide and also ensure there is compliance.
Outsourcing HR services also helps ensure that your employee management practices are within the scope of the law. Ensuring compliance is one of the major functions of any HR department, and it’s multifaceted. Failing to comply with these rules can have serious financial consequences but turning to the experts via HR outsourcing helps prevent that. HR compliance implies forming a set of policies in order to guarantee adherence to laws and legal regulations.
You get specialised HR services through outsourcing
Unlike an in-house consultant who may be a generalist and not have all of the specialist skills you require; an outsourced consultancy is likely to have a team of experienced experts across a range of HR functions. There is huge value in having HR management consisting of experts who are ahead of the trends, especially those whose aim will always be to give the business the best possible service.
If your in-house HR staff is loaded with too many responsibilities, chances are that they may not be able to carry out all the tasks as efficiently. Firms that outsource HR services are also likely to have advanced methods and technology for providing HR services. Therefore, outsourcing can help substantially streamline your HR management and maximise efficiency in the discipline.
It’s cheaper than hiring an in-house HR staff.
A lot of people think that HR consultants are expensive to hire, but the truth is they are often a wise investment for small businesses. Hiring a full-time HR employee will cost your business. Hiring an in-house HR team requires paying each individual a salary, not to mention equipping them with the infrastructure and tools of trade required to do their jobs.
With an outsourced HR consultancy, it’s so much cheaper to have access to a team of experts that can use their knowledge and resources to help resolve your HR issues. HR outsourcing allows you to transfer some or all of your HR-related workload to a professional organisation. They will take care of everything from payroll taxes to benefits administration.
Performance monitoring
Outsourcing improves business focus and allows management to direct staff energies strategically. The growth rate of any business depends directly on the performance of its employees. Simply put, efficiently performing employees make an efficiently functioning company.
Although managers and supervisors can monitor the performance of your staff, the HR department can also help with this task. An external HR service provider can efficiently compile data on employee performance and check whether the employees are complying with your company’s policies. Moreover, external HR service providers can also provide in-house training to your employees, hence assist in improving performance for your organisation.
Tackling skills crisis
Outsourcing HR can help you in the so-called war for talent. A shortage of people with the right skills means that you need to attract, train and retain the right people. Outsourcing your HR talent management function can provide the information you; your managers and your employees need. You can identify skills gaps and allow employees to see their career paths within your organisation, as well as ensuring that they have the right training and development — including annual reviews or continuous feedback — to get where they want to be.
How much does outsourcing cost?
Obviously, this will vary depending on which HR services you choose to outsource, the size of your organisation and the complexity of your solution. It may be tempting to look for so-called best-of-breed solutions for individual processes but outsourcing a number of HR functions and payroll together is likely to be more cost-effective, will ensure that everything works well together and will provide better data, as it connects information from different sources. You should look for a solution that is scalable and will allow you to add new technology as it becomes available or when your needs change.
Companies in need of HR support should consider outsourcing. An external provider can help fill time gaps and provide the hands-on attention needed to get tasks done well. It also frees up internal resources, allowing them to focus on company growth.
