Why outsourcing HR and Payroll functions should be considered by businesses?

What is HR outsourcing?

Human Resources outsourcing is when you contract with an independent service provider to handle some or all of your HR functions. You can contact us for a variety of services, from basic daily HR transactional activities to more strategic services.

Which are the HR sub-functions that can be outsourced? And time for outsourcing?

As a business owner, you can think of outsourcing some of the HR transactional activities like payroll & benefits administration, attendance & leave management, wellness tasks, statutory compliance, etc.

You may also think of outsourcing HR strategic services like recruiting, performance management, employee development, capability building, talent management, data analytics & insights, etc.

• Trigger points for HR advisory & payroll outsourcing are:

• Payroll issues (delays, errors, etc.)
• Statutory compliance issue
• Non-conformance in internal audit
• Employee voices
• Manager discomforts with HR reports
• Non-conformance in HR audit / Health Check
• HR fire-fighting in mode
• Decreased / No focus on developmental initiatives & performance management.
• Nonavailability of skills & competencies for business
• Retention issues or attrition challenges

If my company already has an HR person or department, can I outsource HR & why?

Yes, whether you have HR or don’t have HR, as a business owner you may take a decision to outsource HR services based on your present HR status quo, capabilities, business priority, challenges, etc. Let’s look at both perspectives with some reasoning around them.

As a business owner, you’re probably aware of how important it is to have an effective human resources department. But if you don’t have internal HR to handle these functions, then there are some serious consequences:

• company objectives & employee goal misalignment,
• performance issues due to lack of skills or competencies, 
• team conflicts, 
• working in silos, lack of collaboration & involvement, 
• payroll-related grievances, 
• non-compliances with statutory rules etc

Therefore if you don’t have someone on your team who knows how to handle HR functions, your outsourcing partner serves as the HR face for you and your employee.

If you have an HR person or department, HR outsourcing is not a replacement, but rather a partnership and an extension of your in-house team. As a business owner, there may be many reasons that you decide to partner with external HR agencies to work with you and drive HR transformations. This reason could be:

• You are aware of gaps in HR performance and may need to strengthen the present HR team capabilities or HR process wherein you need an HR expert or HR advisory.
• You may need to bring focus on a specific HR function as a business priority.
• You may need to free up the present HR team from HR transactional roles like payroll & benefits management, compliance management, etc. so that they can focus more on developmental & HR strategic initiatives.

What are HR outsourcing benefits to businesses?

Outsourcing HR can help save you time and money and can take the worry out of certain areas of compliance. You can choose to outsource some or all day-to-day administrative duties across HR, talent management, payroll, benefits, and more.

• Take administrative tasks off your plate and free up time to focus on strategic goals, such as performance, employee retention, development, and growing your business.
• Reduce time spent resolving issues and answering employee questions related to HR, benefits, or pay.
• Save money on hiring additional HR personnel.
• Hire the right talent.
• Reduce onboarding and training costs
• Establish performing teams
• Build skill & competency levels
• Build engaged & involved teams
• Receive support for compliance with employment laws and regulations, workplace safety, payroll and tax, and more – potentially saving your business from compliance fees and penalties.

Thus, HR outsourcing will help you to focus more on core business…