Are you interested in outsourcing the transactional parts of your HR services so that you can focus on the things that add more value? But are you also concerned about losing visibility?
In recent years, acceptance of the value of outsourcing transactional HR tasks has increased as organisations have come under cost pressure and, more importantly, as HR has embraced the business partner role. In this role, the ability of HR to contribute to employee development, organisation development, employee retention, and a positive, motivating work environment is critical to business success.
Outsourcing allows companies to offload work that isn’t part of their core business mission and can also save money. While some companies outsource their HR needs to a single external service provider, it’s more common for them to segregate and outsource individual functions to a range of specialised external providers.
There is no definitive list of what an organisation should or should not outsource. The decision is normally based on the type of company, strategic focus, and the role that HR needs to have in helping achieve the organisation goals.
Commonly outsourced functions include:
- High-volume and contract recruitment
- Assessment and reference checking for new hires
- Payroll
- Benefits administration
- Creating/updating employee handbooks and policy manuals
- Training
The following functions are often kept in-house:
- HR strategy
- Talent development
- Manpower and succession planning
- Performance management
- Organisation development
Here’s a step-by-step approach to help you decide what to outsource and what to keep in-house.
Step 1: Identify Your HR Strategy
It’s important to start by re-defining the strategy for HR in your organisation. What is the role it needs to play to drive the company mission, what does it need to achieve and how will that success be measured? At this point you need to decide what HR functions have elements that are unique or strategic to the success of your organisation.
Step 2: Identify Which Functions Can Be Outsourced
Any roles HR manages outside of the elements defined in Step 1 can be considered for outsourcing. Key factors to consider are potential cost avoidance, ease of segregation from associated functions for processing, and internal expertise levels compared to those needed to operate effectively, (i.e. those areas where regulations change frequently or require very specialised skills).
Step 3: Find a Trusted Outsource Service Partner or Partners
Compare location, benefits, costs, and approaches of different potential partners, and conduct background checks to ensure that you take a considered decision. The relationship you create with your service provider is critical to your outsourcing success.
Look at the option of having a one-stop-shop centralised service provider that can handle several functions if available. Also consider whether you can link external systems and processes with your HRMS to provide a seamless experience for employees and to protect integrity and accessibility to data for analysis and reporting.
Another potentially cost-effective option is a go between company that contracts the full range of required services on your behalf. This saves you time and effort for negotiating and managing multiple contracts, creates centralised accountability and speeds up the process of finding good quality local service provision.
The Bottom Line
Outsourcing enables a company to focus on HR activities with the most strategic value, while saving money and benefiting from the specialised expertise of outside firms.
You can maintain control of important HR functions and help HR become a more efficient and effective player, but you need to find trusted partners. Why not take a look at HRBluSky, a UAE-based HRMS that provides unique fully-integrated service provision for key functions such as payroll, visa processing, medical benefits, travel and more – and all with no need to worry about loss of visibility as you manage requests and track processing right from inside the system.