Struggling between recruiting, payroll, and compliance? You may barely have the time to focus on the core aspects of your business. Sounds familiar? If so, you are not alone. Hundreds and thousands of business owners struggle to balance operational tasks with growth activities. In fact, 36% of HR leaders lack the resources to recruit top talent.
This is where HR outsourcing, otherwise called HRO, comes into the picture. What is it? What are its types and why should you explore this? We’ll answer all of this and more in this blog.
What is HR Outsourcing?
HR Outsourcing refers to the practice of hiring a third-party expert to handle all your HR operations—hiring, payroll, compliance, employee engagement, and more. This third party may manage some or all of HR operations, depending upon a business’s unique needs.
Why would they do it? The short answer is access to specialized experts, top talent pools, advanced tools, and scalable solutions. This is beneficial for companies of all sizes that may lack the necessary resources to build a fully functional and well-equipped HR team in-house.
Types of HRO Services
As we mentioned, a third-party expert may handle some or all of your HR needs. To help you understand it better, here is a breakdown of the specific sub-services that make up the larger umbrella of HR outsourcing services.
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Recruitment Process Outsourcing (RPO)
Recruiting employees is not as simple as it used to be. With complex role functions and newer job roles, finding a candidate who fits the bill can be challenging. Moreover, you need to undertake a needs assessment to identify your company’s unique hiring needs.
Not to forget the long screening, assessment, and interview cycles that may take anywhere from a couple of days to weeks and months to fight for the ‘right’ candidate. “Why?” you may ask. Well, because you may not have access to a qualified talent pool in the first place. Another hurdle could be offer management. This includes creating the perfect offer that aligns with the company’s needs, is compliant with the industry standard, informs the candidates about it, and answers an endless list of questions that they may have.
RPO is your company’s strategic decision to make screening and hiring more efficient and effective. RPO experts take care of everything for you. They:
- Have access to the qualified talent pool.
- Will work with your internal team to conduct a needs assessment.
- Will study how your hiring is affecting your operations.
- Will create a custom solution.
- Have the necessary Service Level Agreements (SLAs), technology, and reporting systems in place.
- Are experts at screening, assessing, and interviewing candidates to identify the fit.
- May also support your team during onboarding.
- Provide you with important reports like time-to-fill and cost-per-hire.
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Payroll Outsourcing
Payroll is an important function of a company. Unfortunately, it can get equally complicated, especially with tax deductions, law compliance, printing pay cheques, setting up direct deposits, and more.
Payroll outsourcing teams take all this headache away, ensuring your employees get paid on time, and your company is compliant with legal regulations. As a payroll outsourcing team, they will need access to your business bank account and employee time tracking system. Once they have access to this, they will take care of your payroll activities. This means:
- Tracking and implementing benefit deductions
- Calculating taxes and withholding the right amount.
- Maintaining confidentiality on wage garnishment and corporate tax filing.
- Eliminating software concerns.
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Compliance Outsourcing
Compliance outsourcing means having experts take care of monitoring, auditing, and implementing compliance with legal and regulatory requirements. As such, these experts help you avoid penalties, follow labor laws [local, national, and international], as well as maintain industry standards. These experts will also assist you in developing policies and evaluating potential risks. Additionally, they may also provide employee training on legal and regulatory requirements.
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Benefits Administration Outsourcing
Employees deserve more than just salary for the way they help your company grow—for instance, health insurance, wellness programs, and retirement plans. Unfortunately, finding the right partner who will offer these to your employees on your behalf at a cost-effective price is challenging.
A third-party benefits administration outsourcing partner has all the contacts you need. They can get your employees high-level programs at low costs which are attractive, compliant, and related to your employee’s needs.
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Training and Development
As an employer, you are responsible for your employee’s learning and professional growth. Consequently, you need to periodically invest in training programs and workshops that bridge the skill gap and enhance present skills.
Training and development outsourcing gives you access to top-class professionals, each well-known in their field for designing and delivering employee training programs. They offer customized learning solutions that are best suited for your employees.
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Employee Relations
Another important function of HR that can be outsourced is employee relations. This means that a third-party partner acts as a mediator between you and the employee. They offer counseling and conflict resolution sources. Some of the key areas they can address on your behalf include:
- Workplace issues
- Handling grievances
- Labor relations
- Attendance issues
- Performance issues
- Disciplinary actions
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Performance Management
Employee performance is key to your company’s success and growth. Performance management outsourcing gets you expert support for managing your employee performance reviews, goal setting, and feedback processes. In fact, it makes the entire process extremely simple, objective, and streamlined, considering that feedback processes can often get complex and biased at times.
Benefits of HR Outsourcing
By now, you must have figured out a couple of benefits of HRO services. We will state them explicitly for you for better clarity and understanding.
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Saves Precious Time
HR outsourcing services can take care of routine, repetitive tasks such as employee attendance, tax withholding, and payroll. This way, your in-house HR team can focus on other activities.
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Cost Efficiency
Companies often spend a lot to attract top talents, approach them, and hire them. Moreover, when employees leave, the cost of hiring a new employee may be high. HRO services take care of everything from attracting to hiring talents. In fact, they have a talent pool often readily available for you to hire from.
Furthermore, when you outsource HR functions, you may not require a full in-house team and train them. At most, you may need 1-2 individuals to collaborate with the third-party partner.
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Access to Expertise
HRO providers are experts in their fields. They stay updated on the latest HR trends, laws, and technologies, ensuring your business benefits from industry best practices
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Better Compliance
HRO providers are also well-versed in labor and employment laws. Consequently, they not only help you bridge the current gaps in your practices but also point out potential risks and give you solutions for them. This keeps you free of penalties and legal actions.
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Scalability and Flexibility
As your company grows, your need for HR efficiency grows with it. HRO provides you with the necessary resources and flexibility to expand as you like.
Conclusion
Outsourcing your HR functions can be a complete game-changer for your company. It can free up essential time, which can be invested into better processes that help your company grow.
We, at HRSG, can support you to streamline your HR functions and improve their efficiency. Our tech-enabled solutions are built keeping in mind your company’s unique needs. The solution combines a variety of HR functions, relieving you from day-to-day tasks and allowing you to focus on other value-adding initiatives.
Our Managed Staffing solution, for instance, takes care of everything from onboarding to benefits, payroll processing, and matter monitoring. We also offer verification and screening services with the help of activities such as pre-employment background checks to ensure your workplace is safe with every hire.
Our team of 60,000+ associates across 500+ locations can help you rewire your organization’s workforce administration and compliance practices to meet global benchmarks, ensuring that your most important asset, your employees, is happy with you.
