Human Resources form a skeletal part of any business organization. There are various functions involved in HR, as a process. These include recruitment, payroll, statutory compliance, employee engagement and performance assessment in broad angles. Some of these functions are easier to handle while some require a lot of keen attention, accuracy and repeated investigation to ensure timely and quality in deliveries. For example, if you take payroll as a function, the HR manager needs to ensure the employees get their right salary in the right time. Also there are various factors related to payroll such as time tracking, employee attendance, statutory compliance and related aspects. Such functions are monotonous and involve much labor. Also in a situation where there is a new HR manager, there are many chances that this person can make mistakes since he has very less knowledge about the organization. All these factors have led to the advent of HR outsourcing as a trend in the market.
HR process outsourcing can help in addressing issues related to staffing and skills of employees. These issues could sometimes be cost-related aspects of the organization which are considered non-profits. As per the modern business organization concept, the role of the HR manager is purely related to ensuring employee productivity, satisfaction and in turn retention.
Ultimately, HR outsourcing enables organizations to focus on their core mission by entrusting the HR functions to professional partners who can handle these with the right level of expertise in the right time that is measured and decided based on the organization’s situation. For example, if your business falls in the manufacturing division, HR function is your non-core activity since your organization’s mission is different, while your profession HR partner’s business is to enable you to manage your HR functions, being their core activity.
Argument 1: The Cost Aspect
The modern day organizations look at saving on all costs related to operations, manpower, technology and other related elements. When it comes to HR outsourcing, in organizations where HR is not a core function, obviously there is a lot of argument in the cost aspect. The services need to be unmatched to any other player in the market and the life of the contract depends purely on the fact whether the expectations is being met by the HR partner or not for the cost that is being incurred on the service. The organization needs to clearly decide on what proportion of their HR activity needs to be outsourced, based on which the cost aspect needs to be looked at. For example, if an organization opts to outsource payroll, it is wise to choose a partner who can handle all the related aspects of payroll, holistically. This would save much cost and time for the organization.
Argument 2: Realistic Expectations
Every organization, in this business world understands that realistic expectations matters a lot for any vendor. For every single rupee that is being spent on a service from the vendor, there is an expected outcome in terms of the value for the cost. Many organizations, if they get hurt in the first business transaction in terms of service from the vendor such as any delay in delivery or lesser quality, then they come to a conclusion of opting for an in-house solution. But that is where there are unstable expectations being met. If the HR manager resigns from his job, then again there are all chances of mistakes and delays till the new person sets in. So it is always better to choose the right partner and set the realistic expectations and understand how far he can deliver for your business.
Argument 3: Creativity & Flexibility
During earlier days, it was a scenario where one size would fit for all, but now it is not the scenario. In the modern day scenario there is a need for creativity and flexibility, which is a prime expectation for every business in every function. Especially when it comes to the human resources function, the market changes are phenomenal since it revolves around skills. Based on this, the creativity and innovation is required for the HR services provider, especially in the technology perspective.
Argument 4: Chances for Success
Every business needs 100% chances for success. With the complexity involved in the HR processes such as payroll, statutory compliance and attendance tracking, it is preferred that a professional service provider can handle your requirements in the best possible way. Thus, chances of success are high when outsourcing is opted for. With the attrition rate being high, having a single HR manager handle all your processes throughout is not possible. When there is a change that occurs, it creates some gaps that will create some % of failure which is not the case when outsourced.
Conclusions
To conclude, HR process outsourcing helps for functions such as payroll, statutory compliance, and time & attendance management. But, in all of these cases you need to keep a track of all the background data management to keep the sensitive data safe. Thus, it is important to choose an efficient service provider to handle such functions in a safe and secure manner to prevent any discrepancies.
Stella Lauren is a guest writer, who writes such interesting and useful posts that help businesses to plan all related aspects of Payroll Processing Company.
