Outsourcing HR – Should You or Should You Not?

by | Published on Nov 21, 2017 | Business Process Outsourcing

Outsourcing HRIf you are a growing organization or a well-established one, from building or modifying policies to hiring employees or assessing them, there are many tasks in hand for a Human Resources Manager and they are not easy at all. To create a work culture that stands at par with the organization’s vision and mission is a challenging task. It is, in most situations, for sure that HR first thinks about the organization and then about the people. To hire a full-time HR person or not is a question small and growing organizations ask themselves. While there is no doubt that any organization should invest in reliable and efficient HR, whether to spend its capital expenditure on a full-time HR is a major consideration. With plenty of business process outsourcing solutions available, these organizations could consider outsourcing their HR operations for more efficiency and profitability.

HR and outsourcing, according to Forbes:

“Once upon a time, most HR departments provided one-stop shopping for employees with questions or concerns about benefits, hiring, training, complaints, colleagues, etc. For leaders, HR was the place to go for recruitment, retention and terminations. HR is a critical function and most companies handled it in-house. That’s all changing very rapidly. Today an estimated 50 percent of large companies outsource all or part of their HR needs.”

There is no question about the relevance of HR in any company – they ask companies to treat their employees as good as, or better than their clients, and keep track of every human capital requirement. Most of the organizations we know handle their HR operations in-house thinking that it will help them stay in tune with the employees. Outsourcing HR brings a major benefit in that it can help get rid of many outdated practices among in-house HR departments such as the following:

  • Recording and tracking employee hours manually. Even in this electronic age, there are many companies that are concerned with the security of e-records and consider the switching from papers to paperless a massive task. A 2015 study from Towers Watson showed that almost half of all HR departments still use paper and spreadsheets to track employee hours. This is an inefficient and error-prone process. Organizations can consider outsourcing this requirement to providers that have the experience and expertise to handle these challenges. Outsourcing will help to improve productivity, efficiency, and security.Outsourcing HR
  • Striving to address complex legal issues without expert support. Labor laws and government regulations are constantly changing and complex. In-house HR may not have the time or legal expertise to handle the challenges involved. Using outsourced HR solutions will help to ensure ongoing compliance with present and future laws and regulations, and enable companies to focus on core business functions.
  • Poor management of employee performance and development. Many businesses may find it time-consuming and unsuccessful to track and evaluate employee performance and implement improvement plans. This becomes more challenging for organizations using paper records. This is an important HR function that is best outsourced to experienced providers.
  • Using many vendors to handle HR needs. You may be using multiple vendors, each entrusted with a different HR task such as payroll, benefits, legal issues and so on. Managing all these vendors can be very difficult in-house. On the other hand, you can obtain customized services to handle the entire HR needs of your company from a good provider of outsourced HR services.

From payroll administration to recruitment, other HR operations outsourcing can help the company focus more on their own business. There are some things that cannot be outsourced in HR operations, such as in-house communications, and in such cases, it is best to have an in-house human resource employee.

With as much business process outsourcing companies as there are fish in an ocean, it is a difficult task to pick the best one for your HR operations. To make things easy, hire only an experienced provider so that your company can focus solely on its core business operations.

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