Edu BlogFebruary 23, 2022

Six advantages of using outsourced HR services

There are six advantages of using outsourced HR services

The human resources (HR) division is responsible for managing employees through the entire employee lifecycle. It’s a complex function that involves onboarding new employees, administering their compensation and benefits, managing their training and development and a whole lot more.

However, not every company – especially smaller to medium-sized businesses – has the resources to set up and run a fully-fledged HR division. Consequently, they look to an outsourced HR services provider to manage their human resources function.

Many business prefer to use outsourced HR services because their HR function is too complex to manage in-house. In this way they are assured that all their employees’ needs are taken care of efficiently and professionally.

Here are six key benefits to using outsourced HR services:

  1. Cost savings

The cost of an in-house HR division can be high because it has so many responsibilities. As your company grows and you employ more people, the more complex your HR requirements become and the more HR personnel need to be appointed. Full-time employees require a competitive salary and benefits which can become costly in the long run. It’s also important to remember that the HR division doesn’t generate revenue.

Choosing to invest in outsourced HR services is ultimately more cost-effective because it helps to lower your overhead expenses. Additionally, outsourced HR services are flexible and can be expanded or reduced as your company’s needs evolve. This puts you in control of the costs.

  1. Legislative compliance

The HR function is governed by legislation. In South Africa particularly, there are numerous laws that employers need to comply with when it comes to managing their employees and these are amended often. For a company that does not have the resources to keep abreast of changing legislation, using an outsourced HR services provider gives it access to a talent pool of expertise that will ensure it stays on top of all relevant legislation.

Harassment claims, disciplinary actions and other employee issues are all subject to specific procedures and regulations. Failure to comply with these regulations can result in legal action and harsh penalties, which can have serious financial consequences for the business. And when unions and bargaining councils enter the picture the matter becomes even more complicated.

Allowing outsourced HR services experts to take care of these matters gives business owners the assurance that they are always operating within the law.

  1. Focus on your core business

There are so many facets to the HR function that trying to handle it all in-house can be exhausting, leaving you with little time for your main business activities. Using an outsourced HR services provider frees business owners to focus all their energies on profits and other core business activities.

  1. An engaged workforce

One of the best advantages of using outsourced HR services is that it improves employee morale and ensures they become more engaged with the company.

Placing your workforce in the hands of a team who specialises in outsourced HR services gives you the peace of mind that staff salaries and benefits will always be paid – accurately and on time.

This enhances employees’ trust in the company, improves job satisfaction and drives a positive culture within the company. All of this leads to increased efficiencies and ultimately, a health bottom line.

  1. Better talent recruitment

Appointing an outsourced HR services provider to manage your company’s recruitment will help you reduce the risk of hiring unsuitable candidates and ensure you find the best candidate for the job.

Services that an outsourced HR services firm provides include formulating job descriptions, sourcing candidates, qualification, reference and background checks, pre-interviews and psychometric testing.

The services don’t stop there, however. An outsourced HR services provider will also monitor the performance of your employees and provide you with essential insights into their development in the job function.

  1. Improved employee performance

A thriving company is one that continuously invests in the training and development of its employees. Depending on the size of the company, this activity can be administratively demanding.

An outsourced HR services provider will manage the personal and professional growth of your workforce, and monitor their performance as they progress through their career path. This can take the growth of your business to a whole new level.

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