As businesses continue to evolve, an increased amount of employers have turned to HR outsourcing as a way to cut back on the administrative burdens. According to Forbes:
“Once upon a time, most HR departments provided one-stop shopping for employees with questions or concerns about benefits, hiring, training, complaints, colleagues, etc. For leaders, HR was the place to go for recruitment, retention and terminations. HR is a critical function and most companies handled it in-house. That’s all changing very rapidly. Today an estimated 50 percent of large companies outsource all or part of their HR needs.”
The strongest argument in favor of outsourcing HR can be found in the many outdated practices common among in-house HR departments, practices which create inefficiencies, wasted time and potentially dangerous mistakes. Here are 4 outdated practices which outsourcing can address:
1. Tracking Employee Hours Manually
If you assume that reliance on paper records in HR is a thing of the past, you’d be mistaken. According to a 2015 study from Towers Watson, almost half of all HR departments still use paper and spreadsheets to track employee hours. That process is both inefficient and time-consuming, and tends to create unnecessary errors. At the same time, however, HR departments resist going paperless because the task is so massive, and there are concerns about the security of electronic records. Providers of outsourced HR solutions have the experience and expertise to meet these challenges, improving productivity, security and efficiency.
2. Attempting to Navigate Complex Legal Issues Alone
In-house human resources staff must deal with a continually shifting, and increasingly complex, web of labor laws and government regulations. In many cases, they have neither the time nor the legal expertise to successfully meet this challenge. Using a provider of outsourced solutions ensures ongoing compliance with existing and future laws and regulations, and frees companies to focus on core business operations.
3. Juggling Multiple Vendors to Cover HR Operations
In-house HR departments often rely on a variety of vendors to handle their complex needs—for example, one to handle payroll, another to manage benefits, and another to work on legal issues—creating a patchwork quilt of external providers whose work is not effectively integrated. Managing the work of all these providers can become as big a challenge as trying to handle them in-house. The best providers of outsourced HR services can provide customized solutions to handle the full slate of your company’s HR needs, including time and attendance, employee onboarding, benefits and workers’ compensation.
4. Ineffectively Managing Employee Performance and Development
Tracking and evaluating employee performance—and implementing improvement plans—is extremely inefficient and time-consuming for many businesses. The problem is compounded for the nearly 50% of companies that rely on paper records to manage the process. By outsourcing this critically important HR function, companies substantially reduce workload and improve both performance and productivity.
Although it’s understandable that businesses might resist outsourcing HR functions, the companies which choose to go it alone face the possibility of an increasingly disengaged and demoralized workforce, costly mistakes and potential legal entanglements. Choosing an experienced provider of these services ensures improved performance and allows companies to focus on core the core business operations to increase revenues and grow their businesses.