✓Comfort Zone: It does not take a rocket scientist to fathom that in many companies, one of the most ineffective teams happen to be the HR Team. Either the HR personnel are not professionally trained; or they do not know how to assert themselves internally to effectively perform and bring results; or most times, they tend to get into a comfort zone and stop innovating; or due to lack of inspiring HR leadership. Whatever the reasons are, in our experience we find in the current scenario, internal HR teams have become ineffective and inefficient!
✓ Cost-Effective: An effective HR department requires well-trained personnel and additional office infrastructure. Most small and medium-sized businesses prefer to outsource their HR services instead of hiring professionals and expanding their office space. Once the HR services are outsourced, the overhead costs are easily avoided. Moreover, outsourcing costs are variable and can be expanded or reduced according to company’s business needs.
✓ Risk Management: Outsourcing HR function helps reduce business risks. Most of the labour acts and laws keep getting updated regularly, and it often can become difficult for companies to remain up to date with the latest technologies and business methodologies. Outsourcing firms have HR professionals who keep themselves abreast of the latest laws and services. Moreover, when HR services are outsourced, companies can always remain ensured about uninterrupted services. In short, outsourcing HR services gives you access to a pool of high talent who have hands-on knowledge and know-how on how to run an effective and efficient HR function.
✓ Concentrate on Core: Most companies outsource HR functions as it leads to greater efficiency within the human resource department. Outsourcing HR helps to streamline significant HR activities such as strategy, operations, compliance, payroll and day-to-day employee administration. When companies outsource HR services, they definitely get more time to focus on their profits and other core business activities.
✓ Performance Management and Organizational Development: The core of any HR function is putting in place and sustaining a forward-looking employee performance management. However, this calls for a lot of knowledge and expertise which an inexperienced HR team seldom has. Moreover, this has to be closely coupled with putting in initiatives for the overall organizational development. HR outsourcing firms often monitor the organizational development and the performance of employees, which also leads to an effective training mechanism. This, in turn, reduces the administrative responsibilities of the in-house managers.
In a nutshell, it is in the best interest of companies to outsource HR instead of investing heavily on ineffective internal HR teams; especially given this new normal (covid situation), where HR teams have to be at their best!
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