Managing Human Resources can be a bit of a juggling act. Human Resource managers never know what problem they’re going to need to solve next so anything that can automate or at least help manage the process is a welcome addition to the way things are done.
Outsourcing is becoming a bigger and bigger part of managing a business, and HR is no exception. Just about any function of HR can be outsourced, and there are a lot of benefits of doing so, some of which include:
1. Risk Management
Hiring an HR firm has a lot of advantages. As this is an area where there are so many legal changes and rule amendments, it can be hard for a company to keep track of these changes and updates.In terms of risk management, outsourcing your HR means that you’ll have a professional body on your side to maintain and audit company policies to protect the corporation when necessary.
26% of companies outsource to save money, which isn’t surprising. Most companies have a lot of back-office expenses that churn through revenue (and profits) and more and more businesses are realizing that outsourcing can reduce these costs. Human Resource departments take up space and create a lot of salaries and these costs can all be reduced simply by hiring an outside HR company to take care of all of the necessary.
Efficiency is all about achieving more by doing less. In the context of outsourcing HR, the simple fact is that when you don’t have as many staff you don’t have as many problems. When you don’t have as many processes you have even fewer problems. Efficiency in the workplace is critical, as so much gets measured and managed while bringing revenue in, you don’t want that leaking out through “money holes” in HR. Outsourcing plugs the leak.
4. Employee Development
In the time (and money) saved by outsourcing HR functions, employees can be better educated. Performance management plans can be implemented and managed and business goals can be successfully met. Outsourcing firms are also able to monitor these developments and goals and create reports on the success of them as well as make recommendations on how they could be improved. This takes pressure off managers and bosses who are then freed up to focus on other parts of the business that need attention.
5. Focus on more Important Things
There are lots of other things a business can focus on rather than HR – outsourcing these functions makes that available to both managers and employees. Focussing on the growth of the business rather than the small details of HR can make a big difference to the bottom line of any organization.
The various functions of an HR department can be vast and overwhelming for many large companies, and there really aren’t many reasons to keep it all in-house. More and more businesses are outsourcing their needs for different departments to freelancers or outside firms who are specialists and can do a more efficient job for a client than an employee will do for an employer. One example of such a company is the SAAS company CIPHR. In the coming years, it’s likely we will see more and more of this trend as companies figure out how cost effective outsourcing is, and how much stress it prevents.
Question: How do you feel about Outsourcing Your Human Resource Functions? Do you find useful or not? Have you ever use an outsourced agent to assume some of the HR functions of your business, or not? Please comment here!