The advantages of outsourcing HR
Cost-saving, employee development and risk management
Human Resources is not only responsible for day-to-day management of employees but also for a variety of functions including payroll, benefits administration, training and development, legal compliance and the maintenance of personnel files and confidential records. More so than that, HR has the added responsibility of making sure leadership drives the culture of the organisation.
Many HR execs are against outsourcing, primarily because they feel it provides generic solution that's ineffective for devising HR strategies that cater to the nuanced needs of an organisation.However, for many businesses, implementing and maintaining all of the aforementioned HR functions in-house can be far too complex, as well as costly, and they have found that outsourcing their HR function has several advantages.
Cost Savings. Outsourcing helps reduce the cost of maintaining nonrevenue-generating back-office expenses. A fully functional human resources department requires additional office space and highly trained and experienced HR staff. Depending on the size of your business, the cost of any internal HR resource may not be affordable, especially for start-up companies.
Employee Development. Outsourcing HR functions help businesses manage employee performance and development. Providers implement performance management plans to ensure employees comply with company policies and procedures and successfully meet business goals. Outsourcing firms periodically monitor employee performance and report findings to management. This reduces the workload of managers by minimising the number of administrative responsibilities that they need to focus on.
Staying on top of compliance. Outsourcing allows smaller companies get executive-level HR expertise without paying the cost of having those skills in-house. For larger companies, where compliance and legal liability can be a huge risk as can, outsourcing provides an extra layer of protection, especially If the company does business with the government. HR Managers seldom have the time to keep up with changes in employment legislation but HR specialists do, and they can assist with complaince even in an age of policy uncertainty.