5 Top Reasons for Outsourcing Human Resources Functions

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Save time, money and headaches with a human resources outsourcing solution that has the flexibility to fit your needs perfectly.

If your company is considering outsourcing human resources – either one or many functions – you are part of a growing trend. In the past the Human Resource function was much less complex.There was hiring, firing, payroll and working out the occasional argument, and that was about all that needed to be covered. But lately, the Human Resource function has increased in complexity and become increasingly difficult to manage.

Forget spending time with employees or developing engagement initiatives – benefits administration and compliance issues can be costly and consume a lot of time. An if compliance is not handled correctly, well lawsuits are very expensive.

Sometimes Outsourcing Human Resource Functions makes a lot of sense and here are the six most common reasons that companies outsource:

1) 26% of companies outsource to save money – this isn’t terribly surprising – what company doesn’t want to pinch pennies where they can?

2) 23% of companies outsource to focus on strategy – spreading yourself too thin with all of the administrative tasks doesn’t leave a lot of time for planning, so this makes sense.

3) 22% of companies outsource to improve compliance – it is increasingly challenging to stay in compliance and increasingly risky to not meet requirements so outsourcing this risk is beyond smart

4) 18% of companies outsource to improve accuracy – if you’ve got too much on your plate (and who doesn’t?) accuracy may fall by the wayside, so this also makes sense.

5) 18% of companies outsource due to a lack of experience in-house – knowing your weaknesses is as important as knowing your strengths, so handing off a task you know you can’t handle properly to someone with expertise is a great business decision.

6) 18% of companies outsource to take advantage of technological advances – with big data worth tapping into, but the costly technology needed to really delve into strategic analytics, outsourcing can offer solutions without a significant investment.

What Human Resource functions are companies most often choosing to outsource? Here’s a quick rundown of the 10 tasks most commonly outsourced:

1) 84% outsource HR administration
2) 84% outsource employee assistance/counseling
3) 74% outsource retirement planning
4) 73% outsource pension administration
5) 72% outsource temporary staffing
6) 68% outsource background checks
7) 57% outsource training/management development programs
8) 54% outsource executive development/coaching
9) 53% outsource employee benefit administration
10) 49% outsource payroll

Outsourcing Human resources can be a method for smaller companies to develop a efficiencies without hiring in additional personnel at high salaries or right sizing your internal staff and just keep them and focused on employees. For larger companies, compliance can be a huge risk as can legal liability, so outsourcing grants extra layers of protection.

And if you do business with the government, compliance issues can turn into lawsuits, fines and penalties – no one wants that.


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