Effective human resources processes are vital to any business, but sometimes it can be difficult to manage them well ‘in-house’. For this reason, outsourcing various human resources processes is becoming increasingly popular. So, to help you decide what’s right for your company, we’ve taken a look at some of the advantages and disadvantages of human resource outsourcing (HRO).
What is the Purpose of Human Resources?
A company’s human resources department handles most of the matters relating to its employees. Human resources specialists are responsible for recruiting, interviewing, screening and placing workers, as well as dealing with things like employee relations, payroll, benefits and training.
A large part of a human resources specialist’s role has to do with understanding employment law and ensuring that the company abides by it. Employment law can be a complex area, and covers a wide variety of issues, including:
• Equal opportunities
• Contracts
• Grievances
• Absence management
• Redundancy
• Maternity and paternity rights
• Disciplinary and Dismissal Procedures
What is Outsourcing in HR?
As the field of human resources has so many separate components, many businesses find that it makes sense to sub-contract some or all of their HR processes to a specialist provider. Whether those process be payroll, recruitment or legal advice to managers, using an external provider can have many advantages.
HR Outsourcing – Advantages
Skills and Knowledge
By hiring specialists in a particular field, companies are able to benefit from the combined knowledge and skills of an experienced range of professionals, to whom they may not otherwise had access.
Quality/Increased Legislative Compliance
As specialist HR outsourcing companies focus solely on a single process (such as payroll or pensions for example) they will have greater awareness of the surrounding legislation, ensuring legal compliance.
Efficient
By outsourcing human resources, companies are able to focus on their core business processes. This increased focus allows companies to do more of what they do best and to grow and thrive.
Reduced Cost
The cost of a company managing HR for itself can be staggering, especially considering the hidden costs that aren’t always accounted for. The expenditure of management time alone dealing with, for example, a troublesome employee, is wholly disproportionate in most cases., The costs of poor people management can be substantial and should a company fail to comply with a legal requirements they could be faced with a meritorious claim at an employment tribunal, an award for compensation and large bill for legal costs.
HR Outsourcing – Disadvantages
Giving Up Control
For small business owners used to managing every aspect of their business, it can be difficult to hand over control to someone else.
Impersonal
As a human resources outsourcing company will provide services to a large number of businesses, they may not offer the same level of personalised attention to issues that may have been handled more sensitively in-house.
Distance
Using an offsite company to deal with HR can make it seem as though they are not instantly accessible to employees. This may cause delays in communication.
One of the Best HR Outsourcing Services in Wales
HELP – Howells Employment Law Package is tailor designed to accommodate businesses both large and small, with or without their own in-house HR department.
As each package we offer is specifically tailored to the business requiring it, we avoid the disadvantages mentioned above and pride ourselves on our commitment to providing employers to instantly access, no nonsense legal advice at an affordable price.
Our HELPline gives employers the benefit of immediate support with all of your employment law related issues.
To find out more, or to arrange a free non-obligatory meeting, please contact us on 02920 437 484.
