Human Resource Outsourcing PPT
As a business owner, you’re familiar with the benefits of outsourcing business functions that allow you to avoid hiring new full-time staff or training your existing team. Data entry or call center representatives, for example, can be trained to handle repetitive work. But what about outsourcing roles closer to the core of your business, like human resources?
Human resources are responsible for one of the most important assets of your business: your people. Let’s take a look at why companies outsource some or all of their HR needs and what that involves.
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What is human resource outsourcing?
Businesses can hire a third-party provider to assist them with all or some of their HR needs, depending on the contractual agreement. Human resource outsourcing is a way for businesses to involve an outside provider who has resources to dedicate to any number of HR functions, including:
- Hiring processes
- Benefits and payroll
- Employee relations
- Training and development
- Discipline and termination
But HR outsourcing isn’t always a response to a business’ lack of HR resources: many small-to-medium sized businesses will consult with an HR provider and decide to assign all HR needs to that outsourcing provider. This can be a strategic decision to entrust vital HR needs to trained and expert providers.
Why do companies outsource human resources?
Several reasons can lead to outsourcing human resource functions. While it might feel like you’re giving up control of a core function of your business, outsourcing HR for the right reasons is strategic, and it can benefit your team in the long run. Below are some human resource outsourcing examples explaining when it makes sense to outsource:
- Rapid growth – When your business experiences rapid growth, for example, you might be required to hire HR outsourcing who can help you onboard necessary talent to meet high demand.
- Supplemental HR Assistance – A common misconception is that outsourcing is all-or-nothing. Instead, your business might require supplemental HR assistance for backlogged documentation, increased recruitment efforts, or additional hiring resources. A good HR outsourcing provider can get you the right amount of help when you need it and keep you in compliance.
- HR Expertise – Situations can occur when you require additional HR consultation to navigate ever-changing employment laws and regulations. You need knowledgeable, up-to-date HR resources to ensure what you’re doing is legal and have a plan to remain compliant as laws change.
- Core competency focus – Businesses will outsource many of the businesses functions—including HR—when they resolve to focus on their core business competencies alone. If they choose this, their HR outsourcing provider needs to understand the extent of their role in providing the majority of HR coverage.
What is outsourcing in human resource management?
Businesses often hire HR outsourcing providers for one of two reasons:
They already have an HR department that could use additional support in providing HR needs from an outsourcing provider
The business wants to fully outsource their HR needs, including their human resource management.
When companies go the second route, they sign over the responsibilities that would typically be associated with the job description(s) of a human resource manager. Instead of simply assisting with the various HR duties, human resource managers play a more significant role in the company, going as far as helping determine and steer the direction of company culture. This can involve providing insight on policy decisions.
Not all HR outsourcing providers can provide this level of direction, and businesses need to clearly outline their needs in the contract.
Can human resources be outsourced?
The key to successfully outsourcing any of your HR functions is to both understand your needs and to find an outsourcing provider with the understanding and capability to work hand-in-hand with your business to provide those needs.Some questions for your business to consider before meeting with potential outsourcing providers might include:
- What specific HR functions would benefit from outsourcing?
- What’s a projected timeline for how long we would outsource any number of HR functions?
- What qualities do we value in an HR outsourcing provider?
- What is the point of diminishing returns? Or, when should we just hire full-time HR employees?
- How could an outsourcing provider assist our current HR team/management?
The work of outsourcing any of your HR needs can feel daunting. At Milestone, we know businesses are only as good as their HR teams; we also know not every business is covering these responsibilities as well as they would like. Sometimes you need expert-level assistance to tackle your most important HR needs, and that’s when we step in.
We provide the right outsourced HR help when you need it most, whether that’s helping an established team with HR responsibilities or providing guidance on where you can improve. Our team of certified professionals has experience improving businesses by offering HR support—whether with staffing or consultation—to meet your needs. Learn more about Milestone and the work we do today.
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