HR outsourcing is when organisations contract out their HR functions to an expert company. Businesses can choose to opt for a full service, where everything from recruitment to pay and disciplinary procedures is managed or they can pick and choose the HR outsourcing services they need, such as the development of employee handbooks or managing redundancies.
The exact service that a company chooses will depend on issues such as their size, sector, staffing level and budget, and bespoke HR packages can be tailored to each organisation. Many businesses find that outsourcing some or all of their HR functions brings a number of benefits.
A 2009 survey for the CIPD found that the top three reasons cited for using HR outsourcing were access to skills and knowledge, quality and cost reduction. We take a closer look at these benefits and more.
Cost
Many businesses find that HR outsourcing helps them streamline their business and only pay for the staff and support that they need. By outsourcing part or all of your HR functions, you could significantly reduce your company’s overheads in terms of recruitment costs, salaries and National Insurance.
In addition, outsourcing HR can also reduce the costs associated with business issues such as absenteeism and legal costs because an expert outsourced HR team will help you implement good absence management policies and keep up with compliance to avoid legal problems.
Expertise
Outsourcing your HR gives you access to a wider pool of expertise. An in-house HR manager is likely to have quite a specific field of experience, whereas an external provider will give access to a range of HR outsourcing services, including experts who have worked in a number of sectors and seen lots of different examples of both good and bad practice.
Some small companies opt to give a designated member of staff the HR hat to wear on top of doing their day-to-day job in an unrelated area such as sales or finance. This isn’t ideal by any means – they may lack the expertise and conflicts of interest may easily arise.
Outsourced HR provides a solution to a situation where a full-time on-site HR person isn’t required but HR expertise is.
Due to their experience with different companies, a HR outsourcing service can also help you innovate and come up with new ways to motivate, reward and retain your staff.
Efficiency
Drawing up contracts, policies and handbooks in-house can be time-consuming and distracting. An expert HR company will be able to draw on their wealth of experience to have documentation such as this created and implemented much more quickly than internal staff usually could.
Taking a strategic approach to HR outsourcing will also free up valuable time to concentrate on what you do best, such as bringing in new business and generating new ideas.
It’s worth noting that outsourcing your HR doesn’t mean losing control – you can still be as involved as you want to be and have the final say on things; it just means you don’t have to deal with the time-consuming admin associated with many HR tasks.
Peace of mind
We live in an increasingly litigious society and more than ever companies must ensure they are complying with their legal obligations. Outsourcing HR helps ensure that policies and procedures are up to date and that the legal and financial risks associated with HR are minimised.
Whilst it may, understandably, be a struggle for you to keep up with employment law developments on top of your other tasks, it’s the day-to-day work of an HR outsourcing company who will be dealing with these issues all the time.
Flexibility
Outsourced HR is a flexible option for businesses and doesn’t necessarily represent a choice between outsourcing everything and struggling on alone in-house. Businesses can have support on an ongoing basis or just when they need it.
Many businesses find that outsourced services complement their in-house team perfectly, whether it’s for a particularly complex issue or just an extra pair of hands during a busy period.
These are just a few of the types of outsourced HR services that are available:
- Implementation of policies and procedures
- Development of employee handbooks
- Pay and benefits
- Benchmarking
- Training
- Mentoring
- Coaching
- Counselling
- Career management and planning
- Employee communication and newsletters
- One stop advice and support
- Employee relations
- Recruitment and selection
- Employment contracts
- Disciplinary and grievance investigations
- Solving problems and issues such as dismissals, redundancies and capabilities
- Restructuring
Here at FitzgeraldHR we work with a range of organisations, such as small and medium sized advertising agencies, distributors, hotels, manufacturers, property management companies, printers, taxi services, lift engineers, and many more.
For some organisations we are contracted to handle just one issue, like disciplinary and grievance investigations. For others we act as the company’s HR department, offering a dedicated HR manager and wider team when required.
Some of our clients retain our services and others use us on a project or “pay-as-you-go” basis to write the occasional employment contract, policy and procedure or handle a complicated employment issue.
If you require the services of a HR Outsourcing company, or would just like to talk to someone about your potential HR requirements, give us a call on 01237 239 028 or email office@fitzgeraldhr.co.uk.
