Edu BlogMarch 14, 2023

Myths about HR outsourcing debunked

Myths about HR outsourcing debunked

The growing demands on the human resources division in a company has resulted in the function becoming increasingly time-consuming and costly. Consequently, many businesses have chosen to outsource their HR to a third-party services provider, and are reaping the benefits of this decision – increased efficiency, engaged employees and improved productivity.

What is HR outsourcing?
Simply put, outsourced HR services gives you access to a professional team of experts with specialised skills. The HR services provider manages all or specific aspects of your human resources function, so that you can focus on growing your business.

Yet, despite the numerous benefits it provides, for some companies the jury is still out on whether HR outsourcing is a worthwhile investment for the organisation. The reason? Many have fallen prey to misconceptions about partnering with an HR services provider. if you’re one of the sceptics, then this article will debunk some of the most common myths around HR outsourcing once and for all…

HR outsourcing only works for mid-sized companies

When it comes to HR outsourcing, size truly does not matter. Whether you run a small business, a medium-sized company, or a large corporate, your organisation can enjoy the benefits of outsourced HR services.

What does matter, however, is choosing the right services provider – one that can provide services according to the requirements of your organisation, and scale these services as the business grows.

Smaller companies that outsource their human resources to a service provider are able to focus on activities that generate revenue so that they can grow. The bigger your business grows, the more you will have on your plate, including having to hire more employees. This not only means more HR activities, but it can also leave your company vulnerable to compliance issues and ultimately, even lawsuits and penalties.

Employing a specialist HR services provider is a proactive way to ensure legislative compliance and eliminate problems.

In other words, your company’s willingness to delegate to a team of professionals so that you can prioritise productivity will determine your need for HR outsourcing, and not its size.

Outsourcing HR means relinquishing control 

Actually, the exact opposite is true. The reason many companies choose to outsource their human resources function in the first place is because they feel out of control. And entrusting their HR to the experts means they gain a strategic partner – one that works as an extension of the HR department and will help to improve practices and enhance efficiencies in the organisation.

When deciding to outsource your HR, it’s important to remember that you call the shots – the service provider you choose to partner with works for your company and not the other way around. Their job is to make you aware of all the employment legislation that affects your business, and help you create policies and procedures around these so that your company remains compliant. Putting effective communication procedures in place is the best way to ensure that you remain in control at all times and that your outsourcing objectives are being met. 

HR outsourcing is costly 

On the contrary, partnering with an HR outsourcing specialist can actually save your company money.

The cost of managing human resources in-house can run into the tens of thousands for each employee. Multiply this by the number of employees you have, and these costs soon become overwhelming.

With HR outsourcing, however, you only pay for the services you need. This often makes the service less expensive than hiring new staff to take on these tasks. Indeed, research done by the National Association of Professional Employer Organisations (NAPEO) reveals that the return on investment of using an HR outsourcing provider (in cost savings alone) is 27.3 per cent.

Additionally, according to NAPEO, businesses in a HR outsourcing arrangement grow seven to nine per cent faster, have 10 to 14 per cent lower turnover, and are 50 per cent less likely to go out of business.

A good HR outsourcing provider knows that every business has unique requirements, and thus will formulate a plan tailormade for your organisation, one that is specifically geared to save you money and enhance your offering to your staff.

This is why it’s important to do your homework thoroughly before deciding on an HR outsourcing partner. This article will provide valuable insight on how to go about choosing the right HR services provider for your company.

HR outsourcing will fix something that isn’t broken 

Yes, sometimes it is better not to meddle with something that is functioning well, but if outsourcing your HR function will result in your company being more efficient, more productive and having happier employees, why not do it?

You would consult a lawyer if you needed expert legal advice, right? So why not retain the expertise of a specialist HR company to take care of your HR needs? It just makes good business sense.

Outsourced HR services cannot be customised 

Wrong. One of the primary advantages of HR outsourcing is flexibility. Again, hiring the right outsourced HR services provider for your specific business needs is key. The more comprehensive the services provided, the better, and partnering with a company whose offering covers the entire employment lifecycle will significantly benefit your business over the long term.

The outsourced HR firm won’t understand the business 

Many business leaders mistakenly believe that outsourced HR providers are silent partners that have little to no understanding of the company’s purpose and operations, and are only there to perform a few administrative tasks. The reality is that HR service providers are experts in their field and can provide valuable insights and advice on the day-to-day management of the client company’s workforce.

Working with an outsourced HR provider is a collaboration, a partnership built on a clear understanding of the expectations of both parties. The working relationship relies on transparent and effective communication, as well as trust.

Outsourced HR will negatively impact employees 

This remains one of the most common myths about HR outsourcing. Many business owners believe that outsourcing their HR function will result in a breakdown of the employer-employee relationship, but the reality is that HR outsourcing services actually improve the employee’s experience of the company. Employees feel more secure in their jobs because they know the right HR practices and strategies have been put in place.

Combine this with a payroll experience where everyone gets paid accurately and on time, all the time and you have happy employees who are more productive and engaged in their work. What’s more, a positive company culture will in turn positively impact the bottom line.

Conclusion

Now that the myths around HR outsourcing have been debunked, what are you waiting for? Outsourcing HR services is undoubtedly a smart move, one that will greatly benefit your business in a variety of ways.

CRS Technologies specialises in HR outsourcing and can help you take your business to new heights. Get in touch with us anytime to find out more about what we offer.

 

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