Human Resources deals with a company’s most important asset – the employees. There is a multitude of different tasks an HR department must complete, such as recruiting, creating policy manuals, benefits administration, drug screening and more. Some things, like talent development, are better handled in-house. Other functions, such as payroll, can take time away from tasks that need personal attention.
Over the last ten years, outsourcing has become much more common. It is a great way for businesses to save money because it allows them to trim the HR budget while delegating task to firms that specialize in Human Resource functions. However, it is often difficult to determine what should be outsourced and what should stay in-house.
When Should You Outsource HR?
Many companies may hesitate to consider outsourcing HR because of the costs associated with it. However, there’s a point at which keeping all HR in-house costs more money and time than outsourcing would. But how do you know when your company has reached that point?
HR Staff Are Overwhelmed with Administrative Tasks
If your HR staff are so busy with administrative tasks that they don’t have time for anything else, it may be time to consider outsourcing those administrative tasks. HR is so much more than just processing forms and inputting data. With those administrative tasks outsourced, your HR team will be free to contribute more to strategic planning.
HR Software Doesn’t Support Remote Work
Remote work is becoming more and more common. It’s a popular perk that employees look for in a company. Plus, thanks to the coronavirus pandemic, it’s more of a necessity than ever before. If your HR system isn’t able to support remote work, it’s outdated. HR data should be cloud-based so it’s accessible wherever your HR staff may be working. This may mean an upgrade to your HR software, but outsourcing may be more cost-effective.
HR Costs a Lot of Money
If HR is running inefficiently, it can end up costing a lot of money. In fact, high HR costs can be a sign that you need to make some changes to how your HR department is run. Outsourcing inefficient processes can not only make those processes more efficient but also can save money.
There’s No Employee Self-Service
Employee self-service can help make HR processes more efficient by removing the burden of managing employee information. It also reduces the number of questions that employees may have for HR professionals. If your current system doesn’t have employee self-service, that’s a sign that outsourcing may be beneficial.
Keeping up with Regulations Is Difficult
It can be difficult to keep track of legal regulations and requirements. Not only must companies remain compliant with federal laws, but there are also state and local laws. If a company is international, then there are the laws of each country to factor in as well. If keeping up with these laws and requirements is overwhelming for your HR staff, a HRIS upgrade or outsourcing may help.
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