The many benefits of Human Resource Outsourcing..!!

The Human Resources department of any organization is definitely an indispensable part of its smooth functioning, and is responsible for executing several critical functions including hiring, payroll processing, compensation & benefits administration and HR related country-specific compliance. For both small and large firms outsourcing a strategically vita

l business function like HR could be a difficult choice to make, keeping in mind the probabilities of losing complete control over their valued assets- the human resource as well as the possibility of a decline in the quality of task execution by the prospective vendor. However, actually the contrary is mostly true for majority of organizations whether SME or large. The simple reason for the same which most enterprise owners and managements do not realize, is that the HR is a non-profitable cost center and thereby it is indeed the most suitable among all business functions to be outsourced!

Trends indicate most organizations with employee headcounts ranging between 1000-10000+ are adopting HR outsourcing in order to reduce their costs.  Many MNC’s including Fortune 500 corporate are outsourcing their non-strategic/ administrative HR functions for instance, Payroll processing, Employee Self Service activities and Benefits administration etc to offshore. HRO is slowly emerging as one of the most rapidly growing segments in the outsourcing market

Some questions to be pondered on before considering the decision of outsourcing Human resource activity

1.     Does your prospective HRO Service provider hold a strong market reputation and credibility?

2.     Do the services offered by the provider seem economical keeping your company budgets in mind?

3.     How strong are the financial and technical expertise levels of our prospective vendor?

4.     Are your HR department employees over burdened leading to a lower productivity rate?

5.     Are your cumbersome/unproductive HR administrative activities taking up a major share of your HR management’s time and creating hindrances in taking strategic HR decisions/policy implementation/framework designing etc.?

If most of the answers seem to be going in favor of adopting outsourcing, then it’s high time your organization does indeed go in for HR outsourcing!

Benefits of outsourcing your HR function to a reliable service provider

1.     Cost Saving- The most common reason for outsourcing any function in an organization remains cost savings. HR outsourcing enables companies to save substantial amounts of money as hiring of new employees in the HR team is not required, as and when the company is witnessing growth and increase in size

2.     Efficiency Improvements- If your outsourcing provider is innovating itself using technology as an enabler, the efficiency of the entire outsourcing process is improved comprehensively, as compared to vendors that stick to standard and traditional platforms.

3.     Smooth Functioning of HR Processes- Outsourcing your HR department ensures that additional information overload or any sudden requirement coming up in the organization can be addressed smoothly with the third party vendor taking care of time consuming administrative tasks. Hence, the normal business operations are not adversely affected

4.     Preventing HR Processes from Adverse Turnover Effects – HR outsourcing would mean that any employee’s leaving the organization would not hamper the core HR processes in any which way. HRO allows companies to manage their turnover issues in a hassle free manner.

5.     Reduce Overheads – HRO also facilitates the reduction in high overhead costs also by decreasing sudden, unplanned additional expenses. These expenses can be managed by the HRO provider at a relatively lower cost.

6.     Training Existing Employees on new functions – When new technologies/functions/tasks are added in an organization, the HRO partner can also train and develop the existing employees till the level of the new technologies and place trained professionals in their place in the meantime. Thus, HR outsourcing can help in driving the holistic growth of your company.