A complete guide on Human Resource Outsourcing, Scope, And Pros & Cons of HR Outsourcing
Often considered a no-profit center, the HR department remains the most valuable part of an organization. An HR(Human resource department) deals with anything and everything that has to do with humans in the company. This article aims to address some of the commonly asked questions & concerns about HR outsourcing and its scope.
What is human resource outsourcing?
Human resource outsourcing (HR outsourcing) is the process of hiring an external vendor to handle some of the HR functions of an organization. Commonly, organizations outsource the HR functions like recruitment, training & development, background verification, payroll, and administrations to an external vendor.
The external vendors are Human resource consulting companies with experience in managing HR functions like recruitments, payroll accounting, taxations, etc.
Starting from preparing a detailed company HR policy & procedures to implementing it, hiring & retaining the finest available talent, compensation, appraisals, and payroll takes the time and energy away from some of the most important functions that are crucial for the organization.
An organization’s primary focus should be on talent development. Identifying the right team members and preparing them for the upcoming challenges is the best investment an employer can ever make. However, other time-consuming HR functions like payroll, HR administration, documentation, training, taxes, compliances can be outsourced to an external HR outsourcing services provider for a nominal cost.
Outsourcing these functions to an external HR outsourcing company can free up the HR for more mission-critical tasks. HR outsourcing is all about identifying the less important and time-consuming tasks and hiring an external HR outsourcing company to handle them for the company.
A simple search like “hr outsourcing companies near me” in the google search bar will get you a list of some of the best HR outsourcing companies in your locality. These HR consultants would be able to help you identify the specific processes that you can outsource.
What types of HR functions are generally outsourced?
HR outsourcing companies can offer you a plethora of HR services. Choose the one that you need and let the HR outsourcing company handle the rest.
- Payroll outsourcing: one of the most commonly outsourced functions, Payroll outsourcing is a process in which companies outsource their payroll accounting process to an external HR outsourcing company to help them save costs, time, and effort. Also, you’ll find a lot of budget-friendly payroll software developed by some of the most talented programmers from the USA, India, UK, etc.
- Bulk Hiring: When it comes to hiring a large number of sales or support executives, you definitely need a hand. High volume recruiting is often outsourced to a specialist recruitment agency to help save time and cost.
- Temporary staffing: outsourcing temporary staffing aka contract recruitment saves a lot of time and effort.
- Background checks and drug screening: Often outsourced, there are hundreds of background verification companies that can help you hire right. Your background verification partner is just a google search away.
- Relocation: handling an employee relocation in-house is a no-brainer. A relocation partner can help speed up the entire process and save costs.
- Compensation program & Benefits administration: Outsourcing the benefits administration lets you enjoy the services of a skilled consultant with years of knowledge and expertise.
- Training outsourcing: Training Outsourcing is a process where a company utilizes an external trainer or training organization for conducting training activities for the employees.
- Creating/updating employee handbooks and policy manuals: Hiring an external consultant or agency lets you enjoy the skills and expertise of a seasoned professional who understands the fine details of employee policy and procedures.
- Compliance management: outsourcing compliance and legal can help you save a lot of time and cost. Every business has to stay up to date on the new rules & regulations. Most companies don’t have that kind of resources or expertise on staff. Compliance outsourcing can save some extra money on penalties and restrictions.
Consider your outsourcing options
There are no rules when it comes to HR outsourcing. Any role that is taking your time more than it should, must be outsourced to an external supplier. Weigh your options, speak to the team, evaluate costs, efforts, and time you spend on those tasks. Anything that deters you from your core mission should be outsourced.
There are some of the best hr outsourcing companies that can efficiently handle recruitment, payroll, taxes, training, background verification, etc. while these activities are considered to be very important for the organization, you have more important things to take care of. Like getting more sales, improving the product design, and making more money of course.
What are the pros and cons of outsourcing HR functions?
For an employer, Human resource is a sensitive subject. Every decision related to employees leaves a lasting impression. Outsourcing the entire HR department or some of its functions to an external hr outsourcing company is an important decision. No doubt, it’s cost-effective, yet it brings a few untold challenges like:
- Loss of faith
- Lesser controls
- Poor relationships
- Communication gap
So before you handover, your HR operations to someone, don’t forget to check their credentials, past records, capabilities, and fine details of the service level agreement. Tell them exactly about your expectations, deadlines, and, process.
Define the required performance standards and consequences of non-compliance. A service level agreement can be a crucial document and must be negotiated with utmost care to eliminate any risks.
If you keep the risks aside, hr outsourcing can deliver some amazing results. For example,
Advantages and disadvantages of HR outsourcing
Potential benefits of HR outsourcing
- Improved efficiency
- Reduced costs
- Access to advanced applications & Softwares
- Better reporting & metrics
- Access to subject matter experts
- Low TAT
- Low compliances to handle
- Peace of mind
- Allows you to focus on the core mission of the organization
Irrespective of the size and industry, Human resource management has always been an issue for all employers. Orbit Careers can be your Human resource partner to ensure that matters related to HR are being addressed in a timely and effective manner. Call us for the best in class Human Resource outsourcing services.
Orbit Careers can help you identify the pain areas and let you outsource your entire HR activity from recruitment, administration, performance management, and payroll services. Alternatively, we can customize our offering specifically to your needs including the following services:
- Recruitment, assessment, and selection;
- Learning and development;
- Payroll and benefits administration;
- Administration of the whole employment lifecycle e.g. employment contract development, onboarding, exit interviews;
- Performance management;
- Rewards and benefits; and
- Policy development.
Our HR outsourcing team will precisely evaluate your requirements and expectation and come up with a proposed action plan. We will provide you a service solution that exactly fits your needs.
Orbit Careers is one of the most trustable professional HR consultancy services organizations in India, providing industry-focused Recruitment, HR services to enhance value to clients.
We have developed and expanded our services by listening to the needs of both our Clients and Candidates over 13 Years, becoming one of the leading HR consultancy services providers in India.
Benefit from Orbit Careers experience and know-how to address your ongoing human resource matters
- Quality & Timely Support
- Simplification and standardization of HR Practices
- Support for future growth
- Allows your management to focus on core business
- Significant Cost Reduction
- Access to best practices and thought leadership