4 Reasons Why You Should Consider Outsourcing HR


Outsourcing is a tried-and-tested business model, and today, it’s making deep inroads into the HR space. We look at what HR and recruitment process outsourcing is and if it’s possible to offload the whole gamut of HR processes to third-party providers – allowing SMBs to modernize HR at a fraction of expected costs.

For most companies, particularly those gradually building scale and reach, administrative responsibilities can sometimes prove to be a difficult scenario. Managing human resources is one of those areas which are so critical but can often feel like a diversion from core functionalities, when you’re a small business and on the make.

In this regard, knowing more about what recruitment process outsourcingOpens a new window  is and how successfully ‘offshoring’ HR functions can have a major impact on reducing administrative workloads, freeing up time and efforts. If you haven’t already considered exploring outsourcing, you’d be amazed at the tasks that can be offloaded.

Also read: INFINITY HR Announces New Recruitment Outsourcing FunctionalityOpens a new window

An HR outsourcing company can take on everything, from payroll to benefits, and recruitment to training. Vendors like Professional Employer Organizations (PEOs) can manage all your HR needs helping you focus on critical business tasks even as you grow.

Let’s look at some of the key advantages of HR outsourcing.

1. Cost management

Remember, adopting and embracing HR outsourcing, implies you’re investing in a specialized service and not for the salaries or benefits of full-time HR employees. It also means you’re cutting back on expensive equipment and other resources, like supplies and computers. Further, a fixed rate will help you budget your expenses and plan the way forward more intelligently.

Consider 360-degree providers like CoAdvantage CorporationOpens a new window , an HR provider with a comprehensive solutions footprint. The company recently acquired Total HR, an HR admin firm which provides outsourced payroll, benefits, and HR services for white-collar requirements. Costs are among the biggest motivations for outsourcing HR tasks and it will ensure ‘first time right’, preventing expensive HR errors for SMBs.

2. Core convergence

Often, some of the tasks outsourced, are employee assistance, temp staffing, and counseling. In other words, you’re essentially outsourcing any role that’s not integral to your product or service. What this means, is that you hire a set of specialists, so that HR practices are quality-certified, even as you let your team work on everything that’s mission critical.

Also read: HR Outsourcing Acquired by PaychexOpens a new window

3. Risk management

Of course, once you dig your heels into research and market evaluation, it’s clear that outsourcing has its own downsides. One among them is the tendency for deep dependence on the service provider. However, they can help small businesses maneuver their way through a complex legal and compliance environment, where any miss or error could be damaging. As security risks and threats to business integrity keep increasing, a specialized HR vendor could help navigate these difficult waters, aiding both the business and its employees. “With a shrinking workforce, employers need to differentiate themselves when attracting new talent. One way to do this is to include identity theft protection so that employees will feel protected,” saidOpens a new window  Peter Marcia, CEO of YouDecide, a voluntary benefits outsourcing firm, talking about one of the many specialized benefits that employers could offer through outsourcing.

4. Task and project management

What does an HR team actually do on a day-on-day basis? There’s a wide variety of long and short-term action points that an HR division must implement every day. A carefully created outsourcing plan can help you take a systematic approach, where specific functions are outsourced to vendors who lead in their area of expertise. Or SMBs (with a relatively leaner requirement set) can simply depend on one go-to solution provider — the former will ensure a few levers are working even if one or two were to fail, the latter would keep it all together in a manner that’s consolidated and unified.

That’s the best way to view these issues and the challenge of evaluating HR outsourcing vendors(and if it is for you). The traditional vendor-based approach is fast giving way to software solutions, where you offboard HR tasks to a cutting-edge app, with experts ready to support you as and when needed.

“Cloud-based solutions managed by in-house HR executives can be scaled to serve businesses of any size and operate in a more cost-efficient way than old-school outsourcing. HR professionals using cloud-based solutions can also integrate with existing systems and collaborate with full visibility,” recommendsOpens a new window  Div Bhansali Vice President at AccountantsWorld, explaining how outsourcing tools can seamlessly fit into small to medium business environments.

Also read: How Talent Outsourcing and the Culture Gap Can Produce Better SoftwareOpens a new window

The market today is brimming over with a plethora of vendors offering innovative services, at various price points.. Whether you’re an SMB or an enterprise organization that is looking to contain costs and reduce overheads, HR outsourcing can turn out to be very advantageous.