Why is outsourcing HR activities important

Outsourcing is considered to be a force that caused the drive for virtual organization movement. We all know what outsourcing means, its basic definition of obtaining resources and/or services from outside the company. You must wonder why do leaders outsource? The answer is very simple it allows the organization to direct its internal resources to task that are more important, more benefitting to the organization and devoting time and efforts towards things and tasks it is great at. Outsourcing, especially in human resource management is a strategic move. Human Resource Outsourcing is a process in which a company utilizes the services of the third party to take care of its HR functions. Human resource outsourcing is a cost effective, time saving process. It provides cutting edge over the company’s human resource strategies and improves services to their employees.

Outsourcing is a very efficient process, a live example of it was when an organization as huge as Unilever took the decision to outsource its HR activities in terms of  pay roll administration, applicant tracking, training and development, record keeping, performance appraisal follow up to Accenture in the year 2006.

Now there are multiple questions that might arise with respect to outsourcing as to why should it be done, what is the need of it, what constraints does it eliminate? So, let us have a look at these –

Human resource activities are basically very effort taking in both people and effort aspect, its an intensive labour task and is also a very repetitive routine natured procedure. Hence giving that responsibility to a third party makes total sense, as the specialist of that third party organization would deliver up to the mark results, give efficient output, and obviously save a lot of time , money and efforts. As the process of it is very standard, the time decreased of the whole cumbersome process leads to decrease in time manifold times.

If that is not enough, outsourcing is a huge growing domain business, a very suitable example for it is P&G offering a deal of 400 million $ for a 10 year contract to IBM, wherein IBM will support just about a 100000 employees of P&G in a vast distribution area of 80 countries with services such as payroll processing, benefits administration, compensation, planning, expatriate and relocation services and travel and expense management.

The other constraint that HR outsourcing looks after is competitive aspect. Now every business is a global market place in cut to cut competition and having the right and best skill set employee is the greatest competitive advantage a company can have.  How does outsourcing HR helps in that? It aids in managing non value adding administration functions giving time space and resources to the company to invest in its core competencies.

Now that the constraints and need of outsourcing is looked upon, let us look at the added benefits of outsourcing HR services –

1. Time and cost effective :  It not only frees up organization’s time , but also provides an opportunity of having access to an HR expert at all times. It allows the employees to focus on their actual skill set work and not losing time on administrative work.
2. Hassle free working : It decreases hassle of maintain all record, employee books, benchmarking, candidate filtering. An HRO will help to develop and publish an employee handbook, tailored to the business identity and needs. In addition, those handbooks will be updated regularly as laws, policies, or company needs change.
3. Employee Relation and competitiveness : Maintaining good employee relations is an important part of any business, but it can be very time-consuming for business owners and leaders. It improves the HR policies, employee scale benefits, attracts multiple types of candidates and puts an open cultured organization image to the world. An HRO will be available for the employee relations, as well as being able to offer efficient and professional new hire orientation.
4. Training : Employee training should be done on a regular basis, both for new employees and for current employees who desire to grow personally and professionally. From supervisory training to the avoidance of harassment to medical or personal leave to performance management, an HRO will be there to look after it.
5. Administration Tasks : Managing unemployment claims, leave, and other basic everyday HR tasks can be time-consuming and stressful if the organization is unfamiliar with the proper forms or legal protocol. An HRO will be there to speed on the proper procedures for all types of claims or leave administration, saving both time and energy to focus back into running actual business tasks.
6. More expertise and services : An outside agency who focuses solely on HR offers expertise in areas we might not have thought of and they have the staff to grow with you and take care of all our needs. Because the services they offer are specialist derived, we can add services as needed, keeping our costs lower and our time spent growing your company.

If all of this is not sufficient to catch your eye, have a look at this visual statistic results, as its said numbers do not lie (from multiple surveys and sources the data to formulate this graph was found)

Human resource management is a large domain with multiple types of tasks, to make the utmost use of outsourcing and gaining most effective results the following tasks should be outsourced –

1. Employee relocation : Employees who are moving to start or continue working with the company likely require highly personalized assistance. Avoid a major time crunch and hire someone else to handle it.
2. Employee handbooks and policies : The employees should have access the most up-to-date information about workplace policies and procedures, but maintaining it is a tedious task as well as very repetitive hence this task can be outsourced.
3. Temporary staffing : When hire short-term employees are hired, there is constant recruiting and onboarding new staff. Consider keeping full-time recruitment in house and collaborate instead with an experienced temporary staffing firm.
4. Benefits and payroll : It’s a no-brainer to delegate this task, and as long as everyone gets paid on time, no one will complain. The same goes for benefits packages like when the employees have questions or concerns about coverage, let someone else address them.

So how to find an organization that would do all of the above for you in the very best possible way, the solution to your dilemma is ProRMO. You must ask why? It is because they provide HR services ranging from most basic to most tedious, it is a customizable service providing platform, you pay for what you receive. It can take care of HR needs very effectively by making use of their very interactive portal that too at an affordable cost.