The power of outsourcing your HR

Most companies actively promote the view that the people in the organization are their most important asset. If you subscribe to the principle that competitive advantage is reliant on the culture created in the organization, then you are one of these companies. Unfortunately, Human Resources is typically one of the most neglected departments due to the view that it is a cost centre and not a strategic driver. Some of the most strategically significant work that needs to be done in HR mostly then becomes a burden of management. Some aspects of human resources can become quite complex and most managers do not have the experience or skill to deal with it. HR also has various speciality areas and to expect internal HR staff or managers to deal with it all is not sustainable or efficient.

One of the most over-looked issues in business is the significant changes required from internal processes and people processes to accommodate growth. When your company is growing, the needs of the company in terms of people, skills, processes etc change dramatically. The HR team you had a few months ago will suddenly not be able to deal with all the issues at hand, let alone be able to strategically implement future requirements. As a company grows, the need for subject matter expertise over a wide range of issues become a reality, and there is no way that this can be adequately addressed by the same group of people.

By outsourcing chosen elements of your human resource requirements, you get the skill that you need without the associated cost and risk of doing the work in-house. The return on investment is quite substantial if HR outsourcing is done right.

The list of benefits include:

Saving money

This is a big driver in today’s economy and lets face it – which business owner would say no to getting the right skills as and when you need it without paying for it full-time. The associated cost for full-time employment is also a big consideration, over and above the gross salary.

Diversified talent pool

Outsourcing companies usually have separate experts for each subject matter under the HR banner. These experts work at different companies in different sectors. This means that companies who make use of these services get the added benefit of objective perspective from experts who have a much wider view of what is happening in the world of work. Companies then benefit from new systems and processes that are current and viable, without paying for this additionally.

Mitigation of compliance risk

Laws and regulations change continuously when it comes to the various laws regulating businesses and labour. Outsourcing companies know that their existence is reliant on being informed of all the laws and regulations, thus providing that benefit of knowledge to their customer. Small companies regularly ignore these risks and pay dearly for it.

Creating space for company employees to focus on their functions

The admin burden of HR for managers within a growing company can sometimes be stifling. Apart from keeping them away from their real work, the company runs the risk of incomplete work being done. Outsourcing companies help by doing the job right and creating space for other employees to do what they are intended to do in the first place – generate revenue for the company.

Higher engagement from employees

Employees are much more likely to view a third party as impartial when it comes to disciplinary or performance issues in the work place. They will have access to objective assistance that will look after their interests and the interests of the company.

From experience, the items that offer the highest return on investment and should be outsourced are:

  • Draft and overview company policies & compliance processes

  • Disciplinary processes and procedures

  • Performance management process design and implementation

  • Strategic objectives – goal setting

  • Payroll

  • Salary benchmarking

  • 360 degree surveys

For more information visit

31 views0 comments