Human Resource Outsourcing

What is Human Resource Outsourcing?

Companies these days, partially or wholly, are slowly getting into the practice of Human Resource outsourcing.  More and more organizations are slowly finding it challenging to observe not only the core HR policies of the company, also ensuring that the other key areas in the HR domain like talent acquisition, defining goals of employees and aligning them to achieve the same, determining productivity of the employees, providing best learning and development support, employee engagement, defining proper reward system, handling attrition etc are maintained at professionally and transparently. Most companies today feel the need for an expert to fill up the vacuum in the domain.

What are the services provided by HR Outsourcing Companies?

HR Outsourcing Companies generally perform the following functions for their clients:-

• Payroll Outsourcing services
• Temporary staffing
• Counseling of employees
• Health care benefits of staff and employees
• Screening the background of candidates
• Managing the performance appraisal system, and much more.

Benefits of HR Outsourcing Services

Two main reasons that organizations choose HR outsourcing services functions to a third party firm called HR consulting firms are – cost-effective solutions and saving of time.
The advantages of HR outsourcing services for small business and growing companies are:-

• Even with an internal HR department in place, an external agency will help the firm with compliance related issues especially related to workers’ compensation, health benefits, and other such mandatory issues that deserve dedicated attention and prompt action. This will, in turn, help the HR internal staff to concentrate better on their jobs at hand. Also since the external agency is experienced and is well aware of the ins and outs of handling such issues, solutions will happen faster. All legal issues are handled by the agency as part of human resource outsourcing services.
• HR Outsourcing companies use their vast knowledge and experience to devise attractive employee retention and benefit packages that are designed keeping in mind the company’s long-term and short-term business goals.
• HR consulting firms handle all relevant paperwork pertaining to government rules and regulations, not only for its client but also of the employees of the client company.
• Since the HR outsourcing companies work using the latest technology in the HR domain, the client is able to benefit from the automated fast system without having to make any substantial investment in infrastructure, manpower training and even maintenance related issues.

Factors influencing the choice of HR Outsourcing Services

• The most important criteria for choosing the right HR firm for HR outsourcing services is the years of experience of the firm. It is essential to choose a partner who not only has the experience but also has a proven track record in the field.
• Next, it is essential to look at the rates that the firm is charging for its hr outsourcing services. The outsourced HR industry is a competitive industry and it is best to shortlist the top HR outsourcing companies and then select the final one based on their rate quotation.
• Most of the firms providing HR outsourcing services adopt flexible contracting options thereby providing the client with the leverage to adjust the services required as per the need of the hour.

Why is HR Outsourcing Services Required?

Big or small companies, start-ups or established brands, all companies hire external firms at some point in time for HR support services. Though bigger companies have their own internal Human Resources department, they do enter into a contract with reputed hr outsourcing companies to manage their human resources efficiently and intelligently. From Payroll outsourcing to handle the administration, from recruiting new employees to training them – these are few of the tasks that companies look at offloading to an external HR agency. Payroll outsourcing is generally a service that micro and small firms outsource as they have limited time and resources on their hand and this is one of the best ways to reduce their administrative workload.

Though there are challenges with regard to human resource outsourcing by small businesses, the HR trends of the current year indicates that small firms are ready to go the selective outsourcing way as well make more use of social media for recruiting purposes – this approach is basically to save costs because the market feels that hiring hr outsourcing companies can be an expensive affair. However, it is important to mention here that top HR outsourcing companies provide their clients with customized packages based on the needs of their clients. These companies generally manage the functions from an offsite location but are flexible enough to provide onsite assistance, at the client’s office, if need be.

New Trends in HR Outsourcing Services

Few of the cost-effective trends that are picking up in recent times are:-

• Cloud-based payroll outsourcing systems with accessibility on mobile phones
• Login access to employees into their personalized accounts to check their records,
• Facility for analyzing tax computations as outsourced companies integrate their systems with changes in taxation rules and regulations in the country

These trends are expected to catch up even with smaller firms very soon in the future.