Human Resource Outsourcing

Employees are the basic foundation of every company, therefore managing them is equally important.

Any business or organization, regardless of its size spends large amount of time, money and efforts in dealing with employees and their paperwork for instance- designing the strategies for maintaining the records, improving employee relations, training new staff, ensuring workplace safety, administering employee benefits and motivating employees in order to retain them and much more.

One solution that many organizations have turned to is HR Outsourcing.

Outsourcing HR solutions saves both time and energy enabling a company to concentrate more on business growth related issues.

A human resource outsourcing firm can improve efficiency by in lining the company’s workforce with its goals.

Basically this involves contracting out all or some of your HR related needs to a company who specializes in providing HR support to other businesses.

Human resource outsourcing helps in enhancing the organizational performance with many essential advantages by eliminating the exceeding non- core HR roles.

The basic services offered by HR outsourcing firm includes:

  • Managing the Organizational structure and staffing needs.
  • Recruiting, Hiring, background interviews and exit interviews.
  • Training and development.
  • Tracking department objectives, goals and strategies.
  • Employee orientation.
  • Employee benefit administration like medical plans, health plans.
  • Managing employee’s compensation, dispute resolution and safety regulation.

Companies that outsource HR are generally small to mid size firms, who encourage their employees by giving them the opportunity to do what they are best at, by reliving them of HR responsibilities and handling out their HR roles to the HR outsource firms.
The role of human resource outsourcing services differs with extent of outsourced functions. Some services offer all or nothing approach requiring that they can handle all of their services or none at all, while others provide an option to choose from the list of services they offer.
Based on differing needs of companies, HR outsourcing follows four models:

  1. PEO – Professional Employer Organization
    They assume full legal responsibility of company’s Human resources. The PEO and business owner work as associates, where the PEO handles all HR activities and owner handles core business.
  2. BPO – Business Process Outsourcing
    This refers to outsourcing in all fields for overall process improvements, not just HR functions.
  3. APS – Application Service Providers
    They offer support to Human Resource Information System through latest HR software and web based HR solution.
  4. E – Services
    This refers to electronic HR services which are useful in obtaining online awareness for organizational development. The E-Service providers offer value added web based application to cater to the needs of employers.

The increasing availability of HR outsourcing service providers makes it more easy and compatible to choose the one who suits the best to your company needs.
Whether you are looking to outsource the entire HR function or just a portion of it, you have got many options to choose from and also the flexibility to contract a single service provider for all your HR solutions or choose to outsource different HR tasks to different companies depending on your company needs.
Whereas a sense of distance between the employees and the service providers can bring dissatisfaction among employees and this could be a disadvantage to outsourcing Human resources.
Therefore, a company must be sure of the service provider’s expertise and experience before handing out their most important assets (employees) to them.
As the technology improves, outsourcing will continue to grow.
Companies continue to re-evaluate and re-invent the way they do business, and outsourcing is often a consideration.

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