As far as any organization is concerned, business process outsourcing is something that can help streamline various office processes ensuring more systematic functioning. Many of the firms are now encouraging selective outsourcing that outsources a part of an activity, while doing the rest of the actions in-house. It works well for employee administration tasks that are not part of your core business activities, but require some specialized skills to accomplish.
The outsourcing of H.R. has accelerated over the last decade and will continue as such, as it allows companies to reduce the burden of doing tasks that are not part of the core activities. HR functions do not end with finding, recruiting, training and retaining selected people, but also include managing benefits, compensation, employee and labor relations, data capture, and legal issues. The common functions in HR assigned to a BPO company include payroll, benefits administration, background checks, drug testing, recruiting and training.
Challenges in HR Outsourcing
- Distinguishing between core and non-core activities in HR.
- Less communication between employers and employees; employers may sometimes fail to understand their staff needs completely.
- At times, when an employee quits and the business is using an outside recruiter, the hiring and training process may take a long time. An in-house HR department can be more proactive about hiring and training employees.
Companies should therefore be careful while selecting a service provider. Problems may arise, if the vendor is interested in maximizing their income and lowering their cost, without being concerned about the clients. Reliable outsourcing partners can provide assistance for the entire lifespan of the employees, i.e. from the recruiting and selection process to any terminations and exit interviews. Check for the following capabilities while selecting an HR outsourcing firm:
- Whether they can provide reliable and dedicated payroll and tax administration services.
- Whether they can provide performance management features such as measures of goal setting, departmental tracking, annual/semi annual performance interviews, and so on.
- Whether the professional team is up to date with the latest trends and regulations.
- Check for their customer service by consulting with their existing clients or through adequate research.
However, an HR management system is ideal for companies of all sizes that don’t have enough staff to handle HR activities, when the current staff is buried in work, or when the companies look for options to reduce their workload.