Going The HR Outsourcing Route

When you talk to businesses about HR outsourcing, one thing is clear – the debate is polarized. For some, HR outsourcing is viewed as an opportunity, whereas others see it as a threat. Yet one thing is sure − outsourcing the HR function can be an excellent strategic decision. Those who deem outsourcing a threat are referring to the reduction of HR employees.  

This article discusses outsourcing as a strategy whereby businesses can cut costs while taking advantage of the other benefits of HR outsourcing.

HR outsourcing definition

What is HR outsourcing? HR outsourcing can be defined as a contractual agreement between a third party operating externally and the business or business owner or the employer of the third-party provider. 

When outsourcing services to a third party, the employer or business transfers the responsibility for and management of certain HR functions to the third-party provider.

What is outsourcing in HR?

HR outsourcing is a reasonably new behavior; however, this organizational strategy has been significantly amplified over the last decade.

When outsourcing HR, opting for a resource-based approach and adding institutional theory when making outsourcing verdicts is best.

The benefits of HR outsourcing

When you ask why HR outsourcing is an excellent route, consider the benefits or advantages of outsourcing HR. In practical terms, outsourcing permits the empowerment of the HR department.

The HR staff can focus on strategic HR management rather than conducting low-level HR tasks. However, to understand the benefits better, one should also investigate outsourcing HR functions and how these can be advantageous to a business.

Cost-saving with reduced admin costs

Outsourcing HR functions implies reduced costs. This is because the business team can focus on their core work, either core business or customer-serving tasks.

On average, a business can cut its expenses by at least 20 percent when its HR is outsourced, while a professional HR agent manages the company’s HR-related tasks.

Access to great talent

Businesses can gain access to skilled workers and, in some cases, access to expertise that they might not otherwise have sourced for their team. Consultants, or virtual assistants, are onboarded, offering their skills to a business.

A business can also utilize the advantage of economies of scale, thus being able to service more clients simultaneously. A company can scale up much more rapidly.

Looking at the wellness of employees

You might not consider outsourcing to benefit employees. However, it certainly can. Repetitive and time-consuming work is typically not part of employees’ daily tasks.

Once these time-consuming tasks are outsourced to a third party, the core and onsite teams can more effectively focus on their work. The company can then build up a more robust company culture based on the well-being of happier staff members. The results can include a 13 percent boost in productivity.

Reorganize the essential functions.

A core benefit of outsourcing is that a business can run more efficiently and more so that work can be simplified. Some work is not a core function of the company; nevertheless, it must be conducted to adhere to regulations and laws, for instance, certain HR functions.

Such functions can then be outsourced to handle core tasks without burdening the onsite team. This can prevent the business from facing lawsuits. Risks are thus managed simply through streamlining critical functions within the industry.

Functions reinforced by HR outsourcing

A virtual HR assistant supplies highly skilled knowledge to a business, offering support during the service life cycle. The virtual assistant can assist with the following HR functions:

HR Administration

A virtual assistant skilled in human resources management can offer expert guidance and support to the company. The remote assistant will provide recommendations and help update the company’s employee handbook, offering their knowledge to reduce risks or avoid costly compliance mistakes.

Moreover, the virtual assistant can help ensure the company complies with the regulations and laws.

Payroll processing

When the payroll processing is outsourced, the business’s internal systems are not only streamlined − the virtual assistant is responsible for adhering to total compliance.

The business owner will also have more free time as they will not need to spend energy on this time-consuming task.

Employee benefits

Another HR function is managing the staff benefits. These benefits can include health insurance, retirement plans, and vacation days. Such gifts help to attract great talent to a business.

It can be especially difficult for start-ups who want to attract top talent – more significantly, established businesses can offer better salaries and benefits. However, offering the most you can increases your chance of attracting great talent.

Other HR functions

Other functions that can be managed by a virtual assistant through outsourcing are hiring and recruiting, HR compliance, and staff performance management while concomitantly building a solid company culture.

Leap – It’s time to outsource your HR activities

Whether you are a more established or small business, outsourcing your HR can help you gain business traction on different levels. Outsourcing takes off your shoulders the part of your business, not your primary focus.

This can mean regulations and county laws weigh down admin tasks. The time freed can be more productively spent on meaningful work. Hiring a virtual HR assistant means onboarding great people and exceptional HR knowledge banks that can guide, advise, take action, and arrange matters. 

The Ultimate Outsourcing Guide:

Aristo Sourcing Dark Yellow

Looking to Build a Remote Team?

Get FREE Consultation.