The Human Resources Outsourcing (HRO) industry continues to be one of the fastest developing outsourcing sectors, just behind IT outsourcing. So, why are more businesses choosing to follow this approach to addressing their HR needs?
Comprehensive HR Expertise
Companies that outsource their HR function gain the advantages of a larger, full-service HR department at a fraction of the cost. Most small businesses initially add HR responsibilities to the plate of an existing team member, such as the office manager or finance/operations person, and later, when the needs become more complex and time-consuming, a dedicated HR resource may be hired. The scope of HR is broad, including areas such as recruiting, employee relations, compensation, employment law, training and development, payroll, benefits, and labor relations. Even for resourceful, trained HR professionals, it is nearly impossible to be an expert in all facets of the field. HR outsourcing companies, on the other hand, are in the business of being HR experts. With a comprehensive and up-to-date knowledge of all things HR, they are able to contribute measurable value by mitigating organizational risk and increasing performance from the organization’s greatest asset—its people.
Proven HR Framework
Establishing and maintaining up-to-date processes, policies and tools for the HR function takes an incredible amount of time and effort. A reputable HRO company brings with it the framework and best practices to quickly turn your company into a well-oiled HR machine. Rather than spending time reinventing the wheel or suffering from trial and error, your organization benefits from a proven approach that, when done right, is tailored to the culture and unique idiosyncrasies of your business. The result is an infrastructure that positions an organization to be an employer of choice, equips supervisors to be effective at leading their teams, and enables leaders to focus on their core business objectives.
Many businesses initially opt for HR Outsourcing because it is an affordable way to address a business need—only later to realize they have gained access to a wide range of valuable services. Depending on the HRO provider, services such as compensation planning, recruiting, employee surveys, legal counsel, and leadership development may be inclusive. Rarely does a business incur expenses that are poised to seamlessly scale and contract incrementally with the fluctuations of your business. Choosing the HRO path provides businesses the ability to easily forecast and manage budgets related to the growth or contraction of their employee population.
Whether a company’s motivation to outsource HR is due to its desire to gain the expertise of an HR department, to leverage an established HR framework, or to take advantage of the financial value and scalability, HR Outsourcing is an option worth considering. With a growing number of HRO providers, organizations are in a position to choose the best fit for them. In addition to criteria such as services offered, HR competency/credentials, pricing, and reputation, companies should also assess the amount and regularity of on-site support and, perhaps most importantly, the cultural fit with your company. An HRO provider that weaves into the fabric of your company while delivering on a people strategy that is in full alignment with your business strategy will deliver measurable value.