Outsourcing has become a major phenomenon in human resources (HR) over the last decade. Most companies are now looking to outsource their HR services in order to continue growing while curbing their payroll and overhead costs at the same time. Enterprises, however, do not prefer to outsource all their HR functions to a third party; rather, they like to retain control over activities like reward management, grievance redressal and discipline that are considered important.
Below are 6 important things that you need to consider while outsourcing HR functions to an external service provider:
- Flexibility & Agility
Your HR outsourcing partner will not be able to value add to your organization if they are not flexible. Every business requirement is unique and needs customization to succeed. Your outsourcing company should have the bandwidth for higher customization of its services to perform better. A HR company with a flexible workforce ensures its clients of a higher success rate.
Look for an HR service provider who offers a host of HR solutions – from payroll, tax and employee benefits, and management to regulatory compliance and employee welfare services (EAP, higher studies sponsorship, value-added employee services such as discounts for travelling, shopping, entertainment, gym memberships, flu shots etc.).
A feather in the cap of an HR partner will be an accreditation like an ISO certification. An industry- approved accreditation certifies that the professional practices of the company are satisfactory. It also signifies that they are ethical and that they engage in suitable quality assurances. Accreditation is an assurance that you will be working with a secure outsourcing partner.
- Technological Innovations
The new software have revolutionized the various functions of HR Management & Information systems. These software have significantly improved HR productivity by further streamlining things like compliance reports, employee benefits, payroll functions, lowering the hiring cost in the process. Such information systems have modularized compared to paper-based systems, thus making outsourcing a much more attractive proposition. Web-based HR portals provide employees with 24-hour access to information, including insurance carriers, health providers, asset managers, up-to-date company information, and employee data (for e.g. address change or online tax exemptions). Make sure your potential HR partner is equipped with the latest HR tools.
The common issues faced by an enterprise that decides to outsource its HR functions to external service providers include language and cultural differences. It is essential to see that both parties communicate effectively in such a manner that they overcome misunderstanding and fulfill each other’s requests successfully. Accessibility during an hour of crisis must be considered while selecting an outsourcing partner. This in turn means continuous access to robust modes of communication like email, messenger and phone lines. Ensure that your partner has access to good channels of communication.
- Security issues
Many HR partners use web-hosted software to handle HR functions, leaving sensitive employee information vulnerable to security threats as well as crashes. Scrutinizing your potential partner’s security record and verifying with previous clients is essential while shopping around for web-hosted HR services.
Your goal should be to choose an HR service provider who becomes an extension of your company. They must be fully committed to making your processes, environment and work experience better while also supporting your business strategy actively.