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Human Resources Outsourcing

 

 

 

 The Human Resource Outsourcing (HRO) implies outsourcing such corporate functions as recruiting, payroll and benefit processing, etc.  Many companies hire qualified accountants from out side to check the financials.  Companies started outsourcing Payroll to a third party company. This may have been the beginning of Human Resource outsourcing (HRO).  HR outsourcing is being implemented in large scale.

 

Who can look into HRO?

    Outsourcing is a cost-effective alternative to hiring an in-house human-resources staff.  This is particularly true if the company/organization has no time or the resources to manage HR functions. Many HRO companies offer a wide variety of services to companies so that these clients can focus on their core business and still establish and maintain good HR policies through HRO.

 Are you inclined to HRO?

 You ask yourself the following questions, to decide if HR outsourcing is right for you.

  1. You do not mind someone else handle your HR functions?
  2. Do you have dedicated HR team/department which is managing well?
  3. Can your HR team cope up with all the future expansion of Company?
  4. Is it possible to start a new Project within the shortest possible time?
  5. Can your business afford an HR outsourcing firm?
  6. Are you confident of managing HRO vendors? And do trust them?

   If you're not comfortable with an outsider handling your HR functions, outsourcing probably isn't your best option. Even if you are not comfortable with entire package, you may look into many HR functions that can easily be outsourced: recruiting, staffing, benefits, payroll and training.

Questions you should answer once you decide to outsource:

 1. How many employees are working in your organization?

2. How many employees are there in HR Department?

3. What HR outsourcing services are you interested in?

 

·          Benefits Administration (insurance, Section 125 plans, consulting, COBRA)

·          HR Management (employee handbooks, manuals, compensation, training, etc)

·          HR Technology (HRIS, reporting, payroll/benefits integration, etc)

·          Regulatory Compliance

·          Recruiting (applicant tracking and testing, job postings, background checks)

·          Risk Management involving wellness,  Workers' compensation , security etc

·          Payroll (processing, tax filing, direct deposit)

·          Total Outsourcing (complete replacement of in-house HR function)

·         Others?

 

     4. What are the main reasons for your interest in an HRO Provider?

·          Maximize internal resources to focus on our core business

·          Offer my employees better benefits and services

·          Switching providers to get better service or to save money

·          Other reasons?

     5. When would you like to start receiving HR outsourcing services?

·          ASAP ,  In two weeks,  In one month ,  In two months ,  More than two months?

 6. Do you have a predetermined budget for these HRO services?

 

Benefits

  Focus on core business Every company is started with a Vision and Mission . And the aim of the company is to achieve   these. As we all experience, every business has limited resources. Every manager has limited time and attention. HR Outsourcing helps to focus on more important things than the routine work

  Control capital costs Your fixed costs are converted into variable costs.  HRO releases capital for investment elsewhere in your business. Outsourcing can also make your firm more attractive to investors as they realize that you are investing   capital directly into revenue-producing activities.

  Product costing If a Company does everything themselves, their expenses are much higher due to their investment in research & development as well as marketing and distribution expenses. And generally all these expenditures find their way into the product costing. This makes the product costlier

  New projects take off quickly. Generally the good outsourcing firms have skilled people and ‘right’ people on their rolls. Once you identify a new project and create the Job Description Definitions. The HRO arranges you the ‘right’ candidates and you can have the required resources to start a project right away. Handling the same project in house might involve taking weeks or months to reassign the projects to the current employees or to hire the right people, train them and provide the support they need.

  Reduced risk Change is the only constant! Markets, competition, government regulations, financial conditions and technologies all change very quickly. HR Outsourcing Vendors take responsibility and manage this risk for you, and they generally are much better at deciding how to avoid risk in their areas of expertise. Even if you want to terminate a project and do not need employees on that project, you may simply call off the project by informing the HRO vendor.

It certainly helps to outsource HR activities. Have an open mind and try. You will not repent!