“The best companies outsource to win, not to shrink. They outsource to innovate faster.”
This quote by Thomas Friedman in his novel ‘The World is Flat’ provides an apt explanation for Human Resource outsourcing as well. Though cost savings might be the primary reason for companies to opt for HR outsourcing, many HR professionals agree that it also gives them more time to concentrate on core functions such as business strategy and execution.
Applicability for Human Resource Outsourcing
The HR department of any organization provides a single point of contact for many employee concerns, the queries ranging from payroll to training and interpersonal complaints. Of these, it is the transactional aspect that may be most easily outsourced. Besides, some of the most commonly outsourced functions were found to be:
Recruitment and background checks
Pension and retirement benefits
Employee Assistance Programs (EAPs)
Administration of Flexible Spending Accounts (FSAs)
How to Choose an Outsourcing Partner
According to a survey by SHRM, the top factors to be considered when choosing an outsourcing partner, include:
Proven track record: It is important that you chose a vendor who has earned a great degree of satisfaction in the area you might be interested in outsourcing. This ensures that they would already have the required systems in place to fulfill your outsourcing needs.
Cost of services: Alongside the service and experience offered by the vendor, the cost of outsourcing human resources is an important factor to help you make your choice.
Service availability: Especially for large organizations, an “always on” service is essential for retaining employee satisfaction and serves as a major differentiating factor among vendors. Companies like HCL Tech that use Cloud-based solutions would be able to deliver in this regard.
Main Challenges and how to overcome them
The biggest obstacle to HR outsourcing seems to be the fear of a drop in services rendered to employees due to a third party performing the major part of administrative interactions. To tackle this, the competency of the human resources consultants needs to be ascertained.
Another aspect that companies fear is loss of control over the many traditional business functions. This may be addressed by choosing a seasoned outsourcing partner like HCL Tech, who can transform the HR function while working in close collaboration with company personnel.
Moving to an outsourcing model for your HR needs ensures that your business stays up-to-date with the latest developments, whether related to compliance and regulation or the use of new technologies and tools. Even with all the advantages, the strategic business decision of whether or not to outsource your HR functions depends on the specific needs of your company. Once the decision is made, choosing the vendor is the singularly important step and must be taken after great consideration.
To know more about the topic please visit HCL Technologies.
Photo credit: Lotus Carroll