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Benefits of Outsourcing HR

Benefits of Outsourcing HR

How often do we as organizations really pay attention to our HR departments or give them the due credit for the good work they do to keep the employees happy and focused?

Oftentimes as organizations our focus mainly lies towards the sales, marketing or sometimes even R&D and finance departments. We tend to completely ignore HR at least until we stumble upon a hiccup that triggers the existence of HR department. 

Any organizations human resource department is purely responsible for employee payroll, tax filing, and health administration. In addition, they are also responsible for taking care of legal compliance, maintain files and supervise trainings. Currently many organizations are in the trend of outsourcing basic HR functions as they believe that having this service in-housed is tedious task. They are in fact not completely incorrect on this decision as there are multiple benefits in outsourcing HR for the organization and employees. 

Key human resource outsourcing benefits for the organization are:

  • Cost efficiency (reduces overhead cost, cost for internal training and hiring, avoids penalties for non-compliance, time saving on HR functions )

  • Easy risk management

  • Allows to focus on revenue generating / Value adding tasks

  • Reduces paperwork and minimizes time spent on Administration work

  • Reliability in payroll, employment compliance and labor and immigration law

  • Reduces workforce turnover and ability attract the cream of candidates (Outsourcing HR services supports to streamline the hiring process and is designed to attract the top candidates. They streamline from the inception starting from the initial job description to the interview process. This way organizations get involved only once the pool of candidates are chosen)

  • Minimizes employer liabilities

Key benefits for the employee are:

  • Professional support with employment related issues.

  • Good employer – employee communication (Outsourcing HR avoids unnecessary conflicts between employee and employer as most of the communications and inquiries will be done through the HR BPO service provider)

  • Comprehensive benefit design, including medical, vision, dental, and life insurance plans (Many small businesses struggle today to offer comprehensive benefits for their employees due to the complex cost structures in managing health insurance, Voluntary contributions programs etc. Outsourcing the HR function help companies to better align their cost structures)

  • On-time and accurate payroll processing (Outsourced service providers master the pay roll processes and this is one big win for the employees. Salaries will never be delayed)

  • Up-to-date information on labor regulations and worker’s rights (Unlike having in-housed HR services outsourced HR services are updated with all the new legislations and labor regulations. This is very beneficial for employees as well as employers)

  • Efficient and effective claims processing

  • Streamlined employee orientations, trainings and handbooks

In a nutshell all these HR outsourcing agencies provide professionally managed packages including workers’ compensation, HR compliance, payroll, benefits design and administration and talent management. 

Organizations however have to be cautious when they choose their service providers for human resource outsourcing services should be done thoroughly and complying with legal aspects. Similar to the multiple pro’s we see in outsourcing organizations should be aware of the cons when choosing the right service provider.

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