Why Outsource HR?

The case for outsourcing human resources is growing more compelling by the day as businesses come under increasing pressure to cut costs. When looking at the bigger picture, outsourcing HR – or even merely an aspect thereof – has more than financial benefits. Here are a few of the more important reasons why outsourcing can be justified as a powerful resource.

Right off the bat, outsourcing has numerous benefits, which includes, but are not limited to the following:

• Access to expertise. By appointing an external service provider that possesses over the necessary core competencies in HR administration, companies by default reap the benefits of best practices over and above having access to human resource expertise.
• Savings. Outsourcing increases savings by reducing or even elimination the necessity of purchasing or maintaining costly software. In addition, headcount is reduced which further reduces the amount of time spent on human resource management.
• Technology upgrades. Since outsourcing service providers invest in the most current technologies and software, those valuable resources gets shared with all clients.
• Prioritisation. By outsourcing the human resource function, companies can channel their attention into their business strengths and priority areas.
• Risk management. Outsourcing the human resource function or areas within it, ensures that there is compliance with relevant labour legislation. An area that is of utmost importance in a highly dynamic labour environment such as South Africa.

Over and above the immediate benefits to be reaped from outsourcing HR, there are additional benefits, that emerge over time and is arguably, the most important to consider.

• Efficient HR processes. With outsourcing, various HR operations can be streamlined, offering valuable data to support strategic intent such as talent management decisions.
• Flexibility and change management. Outsourcing affords the organisation much more flexibility and responsiveness towards organic and sudden fluctuations and changes in organisations (such as mergers/acquisitions or even the mere introduction of a new system). Outsourcing eliminates undue complexity from such processes.
• Performance management. Outsourcing human resources allows businesses to track key performance areas and to gain a 360 view of their people, since such reporting in many instances forms part of the outsourcing service provider’s area of expertise or service offering.
• Improved talent management. Client resources can be freed by outsourcing administrative functions, enabling them to focus on managing their talent. In addition, the data obtained from well-maintained databases give managers the information they need to make strategic decisions.

Human resource outsourcing offers businesses the opportunity to bring greater efficiency and strategic planning into their human resource processes. Ultimately, this strategic advantage supersedes even the cost benefits of outsourcing.

Categorised in: Human Resources

This post was written by Blue Core Logistics