HR is a crucial function for business, which most companies wanted to handle in-house. However, things have changed rapidly in the last few years and most large companies are now outsourcing all, or part of their HR processes. SMEs (small and medium enterprises) have also been quick to identify the advantages of outsourcing HR and have followed the larger enterprises.
Here are five major reasons why more and more companies are sending out their HR processes:
Outsourcing HR leaves companies with enough resources to concentrate on core competencies. HR does not bring in any tangible benefit, but consumes a lot of an enterprise’s time and energy. Business leaders do not just have to continually earmark resources for HR department, but also have to spend precious time in overseeing HR functions. In such situation, it is better for organizations to send out a part, or all of HR functions and focus on their core strengths, that help directly in boosting their profits.
Running HR department internally does cost bucks. Math suggests it is more advantageous for the companies to outsource HR and get the same work done as efficiently, while reducing the associated costs. Enterprises can move HR to the outsourcers located in countries such as India, where capable human resource professionals are available at considerably lower wages.
HR processes have currently become regulation-heavy. The authorities have put in place a whole lot of regulations that the businesses have to comply with. HR has to continuously deal with issues such as wrongful termination, sexual harassment, safety violations, etc. When a business outsources the HR function, the compliance related problems become theirs as well.
Recruiting top talent is a skill that HR professionals develop with time. However, statistics suggest that most people working with companies in their HR departments lack the necessary skill set and experience to get the right talent. This happens because the core specialization of the companies is not recruiting talent. It is better for them to outsource the work to the people who have honed their skills in the art of recruitment. This will enable them leverage the skills that are not present in-house.
Quality of HR operations also depends a lot on the access to the latest tools and technology. The companies tend to be hesitant on investing in HR related software as the benefits are not tangible. Established outsourcers providing HR services can be trusted for providing the latest software to their HR staff. Their professionals are well trained on virtual workforce leadership, big data mining, analytics, and social media recruitment, the skills that have become crucial today for HR professionals to possess. HR professionals use these skills to serve clients in effective manner.
Outsourcing HR functions makes organizations leaner and more adaptive to prevalent challenges. It is time to think through the HR processes and determine if outsourcing these will be more productive.