Outsourcing employment to an external provider can free up time and resources while ensuring that critical HR functions are being handled well. Your partnership with an outsourcing company must, however, be successful—otherwise, you may subsequently find yourself with a non-performing third-party partner. Here are six tips for ensuring that does not happen:
Think about you and your company’s strategic goals
To gain the most from an HR outsourcing employment partnership, your goals must align with those of your partner. To ensure a successful outsourcing partnership, ask yourself:
- What are our strategic goals?
- Also, what are the strategic goals of the HR department?
- What do we want to accomplish by hiring an outsourced HR professional?
Identify the HR functions you want to outsource
To determine which HR functions to outsource, you should first identify the various HR elements that you want to manage internally. For example, if your organization is large enough to need a dedicated human resources department − or if you have particular functions (e.g., payroll) for which training and experience are critical − you may decide that certain areas of HR should be handled in-house. However, there are many benefits to outsourcing at least some aspects of human resources management:
- You’ll be able to focus on other areas of your business
- Also, you’ll gain access to expertise in specialized fields such as employee benefits or compensation administration
You’ll save time and money by outsourcing non core services
Choose the right provider for you
The right provider will have the skills, knowledge, and experience to deliver the best service. If you’re outsourcing employment or your HR function for the first time, you need a provider who understands how your business works. For example, if you’re an eCommerce retailer with multiple stores across several countries, it might make sense to choose a provider who has worked with retailers in a similar situation. A good provider will also be able to provide insight into how recruitment works in different countries and different sectors. Moreover, for example, if your company is based in South Africa but has operations in Australia and New Zealand as well, it makes sense for you to work with an agency that also has experience recruiting internationally. They will be better equipped than their competitors at helping you source candidates who are suitable for both roles – rather than just one role or another.
Create a detailed service level agreement
A service level agreement (SLA) is an essential document that both parties should have in place before a partnership begins. An SLA details the responsibilities and expectations of both companies, outlining how they will communicate with each other and what the consequences are if things go awry. It also includes a list of deliverables for each party to complete during their contracted time period. The most important aspect of an SLA is that it lays out exactly the services each company expects from the other, as well as timelines for various tasks such as proposal reviews or project kickoff meetings. If you’re part of a small team building your first internal HR system—or even if you’ve worked on these types of systems before—it can be difficult to set realistic goals while also considering all possible contingencies along the way. This can lead to trouble in the future! By creating detailed specifications up front, though, you’ll avoid any misunderstandings about what’s expected from your new partner (and vice versa).
Make it clear what is in and what is outside the scope of the project
It’s important to know what is included and what is not in the scope of a project. You will want to make sure that there are no misunderstandings or miscommunications throughout the duration of your partnership. Below are some questions you should ask:
- What is the scope of this project?
- Plus, what is outside of our agreed-upon scope?
- Who else needs to be involved in order for us to accomplish our goals?
- How long do we have until we have completed all deliverables and objectives, as well as any other time frames for completion?
Trust (but verify)
Make sure you trust your outsourced partner, but also verify their trustworthiness. Communication and transparency are two critical aspects to the success of any outsourcing relationship. It’s important to communicate with your outsourced partner on a regular basis and ensure that they’re keeping you updated on progress made or issues encountered.
The same applies for them communicating with you—you need to know what’s going on at all times, so make sure they keep you in the loop! Also, make sure that expectations are clear from the start, as well as what will happen if those expectations aren’t met (i.e., penalties). Ideally, these would be written down in a service level agreement (SLA) signed by both parties before any work begins; however, if that isn’t possible due to time constraints or other external factors beyond anyone’s control, at least document them verbally after agreeing upon them together beforehand. No one will then be surprised later on when things don’t go exactly according to plan. Plans can change due to circumstances beyond either party’s control. Such could have been avoided had everyone accepted clearly defined roles beforehand, instead of assuming that everything would run smoothly without putting anything in writing first.
Identify what you need!
It’s important to identify exactly what you need from an outsourced HR partner and to choose the right provider for your business needs. You can build a strong outsourcing employment partnership by making sure that both parties have a crystal-clear idea of each other’s expectations. Both parties should work hard at least to meet, but preferably to exceed those expectations together. Therefore, to ensure a successful HR outsourcing partnership, you need to be certain about what you’re looking for. This will help you choose the right provider for your business needs, and also make sure that both parties understand the other’s expectations. You should always identify exactly what you need from an outsourced HR partner.
Here are some ideas about how to do this:
- Ask yourself whether there are any particular problems with your current processes that could be solved by having someone else handle them on your behalf (e.g., maybe it takes too long for employees to be paid). If so, think about how an outsourcing provider could alleviate these issues (e.g., by making payroll run more smoothly).
- Think about whether there are certain functions within HR that would benefit from being provided externally (e.g., would it be valuable to have someone with specialized expertise in recruiting or employee training). If so, ask yourself which parts of those functions would work best as outsourced services rather than internal ones—and why this makes sense based on your own expertise with running the business.
Remember, the key to a successful outsourcing partnership is finding the right HR partner for your business and matching their capabilities with your needs. You should develop a detailed service level agreement, clearly defining your expectations of each other’s performance − both parties should work hard to meet or exceed those expectations together.