How Does Outsourcing Impact HR?

How Does Outsourcing Impact HR?

by on 5 Jan, 2022

Every year, Human Resources for small and medium-sized businesses (SMBs) is becoming more and more complicated. A small HR team may struggle to cover the entire ground, from the ever-changing legislation to growing turnover rates.

By outsourcing some of your HR functions, you can improve your team’s performance, increase employee satisfaction, and become the employer of choice. A best-in-class HR outsourcing solution can enhance the work of your internal team for a fraction of the price you would pay for hiring new specialists. 

5 Ways HR Is Impacted by Outsourcing 

The global HR outsourcing market is experiencing substantial growth. By 2027, it is expected to reach $45.8 Billion. Companies of all sizes are taking advantage of outsourcing opportunities to improve their internal HR performance. Here is how your team can benefit: 

1. Higher Bandwidth

In-house HR teams spend a sizable amount of time on administrative tasks. While many duties seem straightforward and repetitive, a simple mistake could result in fines. For example, the penalty for a 10-day delay in depositing employment taxes is 15% of the unpaid deposit. 

By outsourcing administrative functions to an HR partner, your team gains valuable time to focus on core tasks. Without constantly being pulled into time-consuming activities, your HR experts can boost employee morale, find top talent, and improve the workplace environment. 

2. Gain Expertise

To perform on top of its game, an HR team should have experts in various fields, including recruitment, compliance, onboarding, workplace safety, and benefits administration. Companies with small HR departments won’t have adequate expertise in all HR niches.

When your HR staff is pressed for time, they don’t have an opportunity to learn or assume new functions. Eventually, you face a lack of expertise that could lead to non-compliance and significant fines.

If you decide to delegate HR to a reliable outsourcing solution, you gain access to an impressive number of experts in all HR fields. Besides getting their assistance to improve your performance, it’s possible to benefit from valuable advice.

HR outsourcing partners readily offer consultations that help your team gain the expertise needed to improve its work 

3. Compliance

Employment legislation is highly detailed and volatile. Staying on top of all laws, acts, and regulations can be time-consuming. Meanwhile, compliance failures are costly. From the ever-changing Affordable Care Act to workplace harassment and discrimination laws, compliance deserves close attention.

By outsourcing HR compliance to a reliable partner, you delegate all compliance issues to a team of experts. These specialists focus solely on compliance, monitor changes daily, and make sure you don’t face any related fines.

Your HR outsourcing partner can even arrange audits to ensure your company stays in full compliance with the current HR-related laws. 

4. Risk Management

Risk management in the workplace is an integral part of stellar HR performance. By identifying possible hazards and implementing risk mitigation practices, your team doesn’t just stay compliant; it minimizes workers’ compensation issues.

Identifying risks early is the key to preventing them. Unfortunately, most small HR teams don’t have the time and resources to implement proper risk management plans. Without a clear understanding of workplace safety measures, your company could be putting its employees at risk.

No matter how small your business is, it needs a detailed and updated risk management plan. This plan can reduce risk in the workplace and keep your company afloat in case something unexpected happens.

An HR outsourcing partner can review your risk management plans and practices to ensure your workplace is as safe as possible. 

5. Better Technology

It’s hard to imagine the operation of an HR department without proper software. HR specialists take advantage of various technology, from payroll processing to applicant tracking.

Effective, high-quality HR software is often expensive. It may be hard to find a comprehensive solution with excellent integration potential. Many companies end up buying several apps, piling one on top of another, and maximizing manual work.

When you start working with a reliable HR outsourcing partner, you gain access to their technological solutions. These programs are designed specifically to handle a variety of functions and integrate seamlessly with popular HR software.

By taking advantage of the best-in-class software provided by the HR partner, you reduce the amount of manual work and minimize errors. 

HR Outsourcing Improves Outcomes  

A small HR team rarely can handle all the necessary HR functions without working overtime or making mistakes. Hiring new experts may be expensive and often unnecessary. A simple solution is to find a reliable HR outsourcing partner.

By outsourcing HR, you are giving your team valuable time to focus on core tasks, mitigate risks, handle compliance issues, gain access to top-notch HR expertise, and work with better software. All of these measures have a direct positive impact on your company’s bottom line.


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Disclaimer: this article does not represent expert advice and is provided for informational purposes. Please get in touch if you would like expert HR advice.

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