11 Reasons & Benefits of Outsourcing HR Services You Need To Know

Benefits of Outsourcing Your HR Services

There are many reasons and benefits of outsourcing, specifically human resources outsourcing or HRO.

Whether you’re a small, medium, or large-sized business, even if you have thousands of employees, you can benefit from HR outsourcing.

Research shows that nearly 35% of companies with 1,000 employees or less outsource at least one HR function. Meanwhile, the “two most commonly-outsourced HR functions” are employee training activities (58%) and recruitment (38%). (source )

Before we dive into the benefits of outsourcing your HR services, let’s first clarify what HR outsourcing is, and why your company needs it.

What is HR outsourcing?

Outsourcing is the process of having another company, entity, or person perform certain work for you.

Meanwhile, HR outsourcing specifically covers the process of outsourcing one or more HR functions . Sometimes, companies have needs that they can’t perform in house, like creating an HR strategy ?or needing business process outsourcing.

Sometimes, companies don’t have the need to hire a person or team full-time to perform a task. Sometimes, they don’t even have the skillset to hire those people.

Is outsourcing HR a good idea?

A frequently-asked question when it comes to HR outsourcing is whether it’s a good idea or not.

Here are a few ideas to help you decide if you need an HR consultancy company or outsourcing service:

1. When you need a large service that your one-or-two-person HR team can’t perform.?
2. When you need a very small service that doesn’t require hiring someone full-time such as payroll processing.
3. When you need an expert in an area you’re not experienced with.
4. When you need a combination of accounting and HR services.
5. When you need occasional recruitment or employee outsourcing services.
6. When you’re not sure which HR service your business needs.

What are the benefits of outsourcing HR services?

Now, it’s time to explore the benefits of outsourcing your HR needs to an agency.

As you will see, there are many benefits. However, not all of them may relate to you.

1) Fewer Operational Costs

One of the top benefits of outsourcing HR is that it helps you reduce your operating and administrative costs.

You don’t need a full-time hire for a few days’ work each month or for irregular work needs.

2) Access to HR Software

Another major benefit of working with an HR company is getting access to expensive HR software at a much lower cost.

HR software is quite expensive for small and medium-sized businesses. But working with an HR company, especially a long-standing one, means you can get access to this costly software at a fraction of the cost.

3) Training Opportunities

Companies need to train their new and current employees for work purposes.

Training can vary from soft skills training, like negotiation skills for sales and marketing professionals, to more hands-down business-focused training.

4) Faster Hiring

A major benefit of HR outsourcing services is recruitment .

Every business will need to hire people in order to grow. But the recruitment process ?is becoming longer and harder, especially as more college graduates enter the market, while companies have limited vacancies available.

5) Lower employee turnover

Many companies are unaware of the impact and cost of employee turnover ?on their business. When an employee leaves, the company incurs money.?This is especially true for sales and marketing positions, where employees’ efforts can be seen and felt by many.

6) Payroll Management

HR companies offer different levels of payroll processing and management.

The basic level is payroll processing, where a company delivers its monthly employee attendance sheets and other information to the HR firm.

7) Manpower Outsourcing

Under manpower outsourcing services, your company delivers employees’ monthly attendance sheets, calculates salaries, and pays them out to your employees.

The HR company is also responsible for collecting and paying employee taxes, making social insurance deductions, among other payments.

8) BPO

Business process outsourcing (BPO) ?involves subcontracting a company’s process needs to a third party. This third party is called a BPO vendor.

BPO covers IT services, call center services or the entire call center unit, and HR services, among other services.

9) Access to Additional Services

An HR consultancy offers HR outsourcing services along with additional business-related services, such as BPO services, HR consultancy, call center outsourcing services,…etc.

10) Fewer Legal Risks

For a company to operate, whether in Egypt or any other country, it must have the necessary paperwork required by the local government.

An HR company performs this task on behalf of your company to ensure you’re in compliance with local laws and regulations.

11) Focus on revenue-generating activities

When you hire an HR outsourcing provider, you let them manage those needs and services you can’t do or don’t want to do in-house.

This allows you to focus on your revenue-generating activities so you can grow your business, and accordingly, your profits.

For detailed information about the 11 benefits, check out the full article