During last 15 years, HR Services have been outsourced by many organizations, small and large, some outsourcing parts and others the entire HR function.
There are a variety of HR Services that lend itself well to be provided by an external HR Services provider and some of them are included below:
The most common service that has been outsourced to an external HR Service provider is Payroll Administration. The major tasks performed by such providers are:
- Paying employee salaries, benefits and relevant taxes.
- Filing taxes and other documentation.
- Resolving issues that arise regarding employee salaries, benefits and taxes.
Typically, the HR Service provider deals with tax and legal requirements reducing the burden on the organization with the specialization they are able to offer with a decent ROI, saving the organization the time and effort of managing all of this.
- Recruiting Talent (RPO)
This is the second most used service popularly known as Recruitment Process Outsourcing. These providers have highly skilled recruiters using cutting edge technology to attract and screen candidates, especially for large volume positions. This frees the organizations to focus on using their hiring managers to conduct interviews to make the hiring decision.
RPOs perform a variety of tasks and depending on the organizations readiness, some or all of them can be outsourced:
- Advertising vacancies
- Filtering applications
- Conducting interviews
- Negotiating offers.
In addition to the expertise in screening and shortlisting candidates, they also are well versed in the legal compliance specific to the jurisdiction and location of hire.
- Total HR Outsourcing Solutions
During the last 10 years, many companies have hired HR BPO vendors to help them with specific HR activities to reduce their workload. However, there are more organizations that are outsourcing the entire HR function.
HR BPO Service Providers can take over the entre HR process to lessen workload. They provide end-to-end from HR Strategy to Services.
Main Benefits of Outsourcing HR Services
- Improved HR Services and Productivity
With the expertise in performing standalone HR Services, they are able to provide significant improvements to service delivery and productivity.
- Cost Reduction
By outsourcing services, you no longer have to manage things in-house. This will reduce your payroll expenses and the money spent on training your staff. Often, companies also outsource to countries with lower wage rates to save costs.
- Risk Mitigation and Compliance
With expertise in legal and regulatory issues specific to the jurisdiction of operations, HR Service providers can minimize the risk and improve legal compliance.
Associated problems that organizations face when outsourcing HR
While outsourcing your HR activities can help you, there are a few risks involved:
- Employee Resistance
Employees who are used to dealing with internal HR tend to complaint a lot more when dealing with outsource providers. However, over a period of time, this decreases due to the comfort level they experience due to responsiveness of thee provider.
- Potential Confidentiality Issues
Sensitive and confidential information such as Employee complaints, personal information and financial records are kept under the custody of the provider. However, with the right provider who has the processes and training to keep them under wraps, the risk of such information becoming public is minimized.
In summary, the right due diligence and selecting the HR Service provider with a track record as well as quality control measures, the benefit of outsourcing outweighs the cost and risks.