Human resources professionals often find themselves burdened by administrative tasks that take their focus off work that could better serve company goals. This issue is especially prevalent in small to midsize companies that lack the HR staff resources that a large company can deploy. Hence, many are turning to human resources outsourcing to improve their department’s performance as well as the company’s bottom line.
HR outsourcing is the practice of hiring a third-party organization to manage the company’s HR activities and administration tasks. Work previously (or unable to be) performed by in-house personnel is delegated to professional sources outside the company. It can include administrative tasks such as payroll and benefits administration, employee recruiting, and more. This frees up staff HR professionals to tend to the more strategic role of overseeing employee performance and company profitability. Here we’ll cover popular HR outsourcing trends that are making it happen in organizations worldwide.
Current HR outsourcing trends and solutions
Historically, payroll outsourcing has been among the most common HR functions to be implemented by outsourced HR teams. However, current outsourcing trends include other HR processes, such as benefits administration, recruitment analytics, accounts receivable and payable, and adherence to frequently changing tax laws. Overall, the HR outsourcing model is designed to help companies cut costs while maintaining HR compliance, administration, and other mission-critical activities. Here’s how.
HR models for years have included the use of outside firms focused solely on payroll administration. Granted, today’s outsourcing companies are providing support for a wider range of transactional HR services. Still, payroll management remains a key HR administration function for which outsourcing offers both time and cost savings. It prevails among the top HR outsourcing trends and pertains to both basic and complex payroll systems.
Increasing employee expectations and requirements can present a substantial challenge to HR teams. And non-administration needs and issues may always require a hands-on approach to talent management. But an array of comprehensive solutions to the administrative challenges can be achieved through an HR outsourcing company.
For example, an HR outsourcing firm can provide an online integrated dashboard for employee engagement and access to company information. This can cover tax forms, leave requests, onboarding and training materials, performance management, answers addressing common employee issues, and more. Certain elements of these otherwise time-consuming tasks pertaining to HR administration become self-serve. And employees can contact HR team members for additional support if/as needed.
With the growth of the remote workforce, reliance on telecommunication has become paramount to many organizations’ business plans. HR outsourcing companies can provide HR professionals robust options for performing their duties from anywhere. Whether they’re at the office, at home, or away, they can address the needs of the HR department and employees from an appropriate device.
Employee recruitment and retention
Time-consuming as well as costly, recruitment includes many functions that can be managed through recruitment process outsourcing. These include advertising, outreach, vetting potential candidates, interview scheduling, testing, and pre- and post-analysis. Doing so leaves the most important functions, such as face-to-face interviews and interaction with prospective new employees, to the in-house HR team.
Furthermore, HR’s care and attention toward existing employees often results in increased job satisfaction and employee retention. This not only helps boost productivity and company growth, but it also saves resources otherwise spent on high employee turnover.
Data and analytics
HR outsourcing can provide a secure, organized database for sensitive employee data, recruitment analytics, company comparisons to industry trends, and more. Real-time reports can easily be accessed and shared with appropriate decision-makers and colleagues for review and discussion.
Many HR outsourcing companies provide a dedicated mobile app for access to HR information and functions. HR professionals as well as company employees benefit greatly by access to pertinent information via their mobile phones. This makes it easy to navigate essential HR functions, day-to-day schedules, workflow, personal management, and more. Sensitive information can be password-protected for use by HR administration and department heads only.
Workflows and approvals
Bottlenecks in communication can impede efficiency in important decision making and necessary program changes. Many HR outsourcing companies provide pre-built workflow programs that disentangle operations and keep work on track. Decisions, directives, and approvals can move quickly without pileups in paperwork and company bureaucracy.
Cloud-based HR solutions
Human resources is responsible for managing a lot of information about the employees and the company. Social Security numbers, tax identification numbers, addresses, policy numbers, contact information, employee benefits packages, and more must all be retained. Besides the burden of collecting and storing the information, much of it is kept on computer hard drives. Because of the potential to lose information through a computer crash or hacking, HR outsourcing firms provide cloud-based solutions that are cost-effective and easy to maintain.
HR outsourcing makes sense for companies of every size
With the convergence of finance, accounting, and human resources in today’s business climate comes the need for better management of time and resources. Especially for small businesses dependent upon limited staff to fill multiple roles, outsourcing makes sense. HR outsourcing greatly benefits the HR professional, the HR department, the company’s employees, and the bottom line.
HR outsourcing frees staff to focus attention on the company’s most important asset: its people. Large corporations, mid-market companies and small firms are now recognizing the convenience, cost savings and other benefits of relying on an outsource whose core competency and specialization is HR administration.
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