Today more and more companies are deciding to outsource their human resource departments. And this move has paid off big. It has allowed businesses to grow by leaps and bounds. Managing payroll, doing recruitment, etc. consumes a lot of time and energy. So, choosing to outsource these time sucking tasks has enabled companies to focus their attention on core competencies. This decision has helped companies save costs, and augment revenues thus they have ended up accumulating more resources. The rub off effect of this move has been that both the employers and employees including top as well as middle rung managers have been able to work more efficiently. It has led to asset creation which has further boosted growth of business.
Big companies had adopted this idea years back in the late 1990s after realizing its cost saving benefits. A pruned staff accompanied by an efficient payroll processing, and streamlined recruitment had brought in tremendous gains for big organizations. Consequently, outsourced HR industry began to grow rapidly. Today HR outsourcing has become a norm. Even small companies have welcomed this proposition. Today over 85 per cent companies outsource at least a part of their HR tasks, and the time is near when almost all companies big, medium and small will follow suit.
Startup companies are specially starting to get in on the trend. They are contracting private agencies to form an external HR department, to manage varied functions. One major gain of this move has been that it has widened the range of benefits offered to an employee. Besides, legal compliance has become more effective. Take health care, for instance. Previously, small companies including startups could only afford to offer employees just one or two plans, but today over a dozen plans are on offer. Things are definitely looking up for employees. Like big organizations, even startups and small companies have begun offering their employees bonus packages. This is a very welcoming change.
The Challenge Of Compliance With Varied Regulations
Compliance with government regulations is one of the biggest challenges faced by businesses. HR outsourcing has enabled them to meet those challenges head on. The regulatory requirements are now being taken care of by the contracted firm, so the burden has substantially reduced. What’s more, companies now no longer have to deal with workers compensation and insurance so they have ample to time to focus on things they do best.
An outsource company can better identify what needs to be done to increase value of the humans working in a business. It can offer suggestions on how to develop employees who show promise. And can help in applying new ideas of making the workplace better and more attractive. It can help create a better workplace environment where employees feel valued, and loved. Last but not the least an outsource company can play a big role in building financial value of the company it is working with. And that is by no means a small achievement. So HR outsourcing is here to stay and will grow even more in the future.