Top 5 Human Resource Functions That Are Majorly Outsourced

December 07, 2016

We all know that outsourcing HR brings end number of benefits to the organization. However; many still cling to the notion that all HR resources should be kept in-house either because they fear a loss of control or worry that the solution won’t be affordable. But the fact is, outsourcing is one of the most cost effective ways to navigate the increasingly complex waters of human resources.

It’s also important to understand that you can pick and choose which of your HR functions to outsource so that you can strike a balance between cost effectiveness and maintaining a comfortable level of control while ensuring your employees do not go without. When thinking about which human resources functions you should outsource.

Outsource This not That

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1 Payroll – This is an accounting mix HR function that you should be thrilled to outsource. Not only is it extremely affordable to let this one go, it can ease concerns of tax compliance and rid your department of dealing with withholding deposits and payroll taxes. If you’re considering outsourcing some of your HR functions, let payroll be the first to go!

2 Legal compliance – This is an HR minefield made more challenging depending on the size of your company and whether you do business with the government. Outsourcing your legal compliance can take this huge responsibility off of your plate.

3. Workforce analytics – This HR function is one you should consider relinquishing from the get-go. If you’re not already performing workforce analytics, it’s something your company can benefit from. What you may not have is someone on staff that’s comfortable or skilled enough to crunch numbers for you. In this case, outsourcing to a firm with robust data capabilities makes good business sense.

4. Recruitment – With recruitment process outsourcing, a professional recruiting firm handles talent searches, applicant tracking, screening, interviewing, background checks and compensation analysis on a project basis. RPO providers specialize by industry. Their expertise helps speed up searches for candidates with particular skill sets and broadens the talent pool needed to increase diversity. Some firms turn to RPO when they need to hire a large number of employees or face a narrow hiring window.

5. Employee benefits – Many a times, companies, especially Small to Medium businesses, find it difficult to provide their workforce with the required benefits. HR function outsourcing can help in dealing with this complication that many organizations face. Benefits administration by your outsourcing vendor helps support your employees. It assists you in ensuring that your organization is in compliance with the government regulations. It allows you to negotiate the rates on coverage of your employee benefits.

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These HR initiatives tend to stay in-house

Employee relations
Compensation design and delivery
Talent development
Capital strategy planning
Succession planning
HR strategy
Performance management
Organization development
Recruiting
HR department management

Importance To Find The Right HR Outsourcing Service Provider

Relying on a partner, no matter how trustworthy, to handle so many essential matters shouldn’t mean ceding a large part of your control to a separate entity. And not all your HR worries will go away the moment you sign with HR outsourcing service provider; there will still be challenges to confront.

What owners gain when they find a good partner is the infrastructure and expertise required to face an increasingly challenging business environment. Doing things the “right” way has never been more difficult — or more important — to accomplish.

9 Essential Questions to Ask Before You Get HR Outsourcer Onboard

Are you familiar with my industry and work force?
How good is your team to handle my HR department
How have you dealt in the past with tough HR issues like discrimination, workplace injury, big claims and lawsuits?
Can you supply the infrastructure to support my business’s unique needs, or does every business get the same exact services?
Have you “been around the block?” How much HR management and benefit administration expertise do you have?
What do former clients usually say about their time under partnership with you?
How much liability can you really take off my shoulders?
How effectively do you comply with workers’ compensation requirements, risk management and claims administration?
Will you clearly outline your fee structure — including likely marginal add-ons — and predict the total cost of services for my business?

Final Thoughts

Outsourcing some, or even all, Human Resource Functions is a proven and widely practiced concept among companies of all sizes. Outsourcing enables a company to focus on HR activities with the most strategic value while saving money and benefiting from the specialized expertise of outside firms.