Human Resource Outsourcing

Unlocking the benefits of HR outsourcing

Human Resources (HR), the backbone of an organisation, plays a critical role in driving its success. The vertical is multifaceted and shoulders many responsibilities that include the following:

  1. Welcoming new hires and onboarding them
  2. Employee training and development
  3. Managing the organisation’s payroll
  4. Formulating policies for employee health, safety and wellbeing
  5. Performance management, rewards and recognition
  6. Taking care of labour law compliance & audits
  7. Handling administrative tasks and risk management
  8. Managing industrial relations and exits

As the function that manages a company's most valuable asset – its people – navigating the complex world of HR is no mean feat. From high turnover rates to the rising demand for remote working, HR professionals face numerous challenges that require expertise and attention to detail. If in-house HR skills fall short, outsourcing is a better alternative to building an in-house team.

Here are a few ways HR outsourcing (HRO) can help:

Access to technology

Technology is a key enabler of organisational growth. It has solutions for a wide range of routine business processes, including HR. Given the focus of HRO companies, they have all the technological solutions for HR processes. By partnering with the right HRO firm, you can access the right technology.

Access to expertise

Each function in HR is an ocean, needing expert inputs from certified professionals. HRO firms have all the required skills and knowledge at your disposal. This takes one worry off your HR function’s plate and helps HR professionals focus on core business functions.

Audits and compliance

Companies must adhere to the labour laws and regulations of the land. In India alone, there are more than 10 labour laws that all HR professionals must be well versed with. The laws are complex and constantly changing. Keeping on top of them is a challenge and violations can result in serious consequences, including legal charges, financial penalties and reputation damage. HRO firms have labour law experts who can help companies with audits and compliance.

Streamlined processes

HR has many divisions such as recruitment & staffing, training & development, health & safety, labour & employee relations, etc., resulting in silos. The system can be efficient only when information exchange among divisions is smooth. As a function’s complexity increases, streamlining the process takes centre stage which HRO firms can help with.

Cost-effective HR operations

HR is an expensive business element. Recruitment, training and development, employee retention, compensation and benefits, and administrative tasks – all these activities come with associated costs that businesses anticipate. However, unforeseen costs sneak up on companies and rattle their budgets. Businesses must absorb HR costs however unsettling they may be. Outsourcing the HR function can insulate businesses against such unforeseen costs.  Studies have shown that HRO can save businesses as much as 20%.

Flexible HR services

Outsourcing allows businesses to resize their in-house HR teams on a need-by-need basis. This saves businesses from having a large HR team on payroll. The majority of HRO firms provide adaptable packages that give businesses instant access to HR resources, tools, and services. As a result, firms may maintain agility without an expensive internal HR team.

Minimised risks

Issues such as discrimination and harassment lead to complaints, resulting in disciplinary actions and termination. They also have legal and financial consequences. Not only do they tarnish a company's reputation, but they can also hinder talent acquisition & retention initiatives. These matters are highly sensitive and require skilled personnel to navigate through the complexities. Engaging a suitable HRO firm can bring in trained experts to help manage delicate HR issues and mitigate associated risks.

Talent attraction and retention

“Great vision without great people is irrelevant” — Jim Collins

HR plays a critical role in staffing an organisation. Talent acquisition is as hard as pushing a boulder up a hill. Holding onto quality hires is even more challenging, as competitors constantly lure them away. By partnering with HRO providers, organisations can use their experience, resources and expertise to assess suitable talent for long-term viability too.

Improved employee engagement

Engaged employees are enthusiastic, dedicated and more productive. They are connected to their work and don't just show up for a pay check. Workplaces that maintain effective communication, encourage interaction and feedback, recognise good work, offer flexible working and focus on employee well-being are known to have more engaged employees. HRO firms can assist you with best practices guidelines and how-to manuals that can address engagement concerns.

Focus on the core business, outsource the rest

HR outsourcing saves time and resources, reduces costs, and ensures compliance with legal regulations. It also enables companies to access specialised expertise and resources that might not be available in-house, leading to improved efficiency and better HR outcomes. HR outsourcing can be a valuable strategic move for companies looking to focus on their core business and achieve long-term goals.

* For organizations on the digital transformation journey, agility is key in responding to a rapidly changing technology and business landscape. Now more than ever, it is crucial to deliver and exceed on organizational expectations with a robust digital mindset backed by innovation. Enabling businesses to sense, learn, respond, and evolve like a living organism, will be imperative for business excellence going forward. A comprehensive, yet modular suite of services is doing exactly that. Equipping organizations with intuitive decision-making automatically at scale, actionable insights based on real-time solutions, anytime/anywhere experience, and in-depth data visibility across functions leading to hyper-productivity, Live Enterprise is building connected organizations that are innovating collaboratively for the future.

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