HR outsourcing – why your organisation should consider it
Published: August 5 2019
HR outsourcing is the process of delegating a companys HR business process to a third party or external agency. It is a hotly debated topic and there are many pros and cons, so what exactly are the benefits? Here are 10 reasons you might want to consider using HR outsourcing in your business.
- Avoid salary costs – Often with a small business there is a limited skill set internally. To bring in a dedicated professional could be expensive to the business and you may not need to have that resource on a full-time basis. As an example, a full-time HR manager could cost your business over £35,000 in salary alone not to mention the holiday and pension contribution costs associated with the role. There are significant savings to be made in outsourcing and not only do you not pay the full-time salary of an outsourced resource you often get access to a wider range of skills than you might otherwise be able to afford with an internal appointment.
- Focus on the ‘day job’ – Outsourcing enables you to focus on your core business processes while delegating sometimes mundane time-consuming processes to external agencies. As a skilled CEO of a small business you may be capable of running recruitment campaign or carrying out a disciplinary investigation but is this the best use of your time and skill? Getting it managed externally means you can focus on the day to day operations of your business where you are needed.
- Free up internal resource – Freeing up internal resources that could be put in to effective use for other purposes is also one of the primary benefits realised when companies outsource. Often staff in small business have to multi-task but it is not always playing to their key strength. By outsourcing activity, you allow your salaried staff to do the job they are best skilled to do which benefits the bottom line.
- Cost savings – Many times, businesses have to suffer internal resource crunches. Outsourcing allows you to gain access to resources not available internally.
- Short term solution – Outsourcing also enables companies to realize the benefits of re-engineering. As businesses grow, demands on staff can change and outsourcing enables you to grow your business without the risk of taking on personnel only to have to release them at a later date. Sometimes a business needs to resource a short-term project and outsourcing can facilitate this need
- Facilitate growth – Some companies also outsource to help them expand and gain access to new market areas, by taking the point of production or service delivery closer to their end users.
- Bring in new skills – Business growth can often dictate the need for new skills that existing resources cannot respond to. You may not have the skills internally to carry out a TUPE transfer, develop a skills audit process, design a development programme or acquire another business and outsourcing can resolve this problem.
- Training your staff – Outsourcing complicated activities can enable the development of internal staff. By bringing in experts in a given field you can have your own staff shadow them and learn new skill sets. Ultimately the external resource may not be needed, and your own staff will be trained sufficiently to manage.
- Get the job done quickly – If you need to get going on a project straight away it might take weeks or months to hire the right people, train them, and provide the support they need. Outsourcing will mean that you can respond to market demands quickly and professionally.
- Expertise to compete with the ‘big boys – Most small firms simply can’t afford to match the in-house support services that larger companies maintain. Running a dedicated human resources or marketing department is often out of the question for a small business. Outsourcing can help small firms act “big” by giving them access to the same economies of scale, efficiency, and expertise that large companies enjoy.
How Kent HR can help with Outsourcing
At Kent HR we can provide a variety of outsourced operational HR support and outsourced HR strategy support options; whether it be a retained service or a specific project. We can carry out TUPE transfers; internal investigations; provide management support or assist through mediation. To find out more about our services contact a member of the Kent HR team.
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