Every organization needs some core functionalities to grow. Human resource management is one such core functionality. Every company or organization needs to effectively manage their HR stream to get the most out of their employees. Even if you have fewer employees in your organization, you will need some basic rules to set the boundaries of human resource management. An organization may need part-time or full-time HR outsourcing services as per their needs. Also, HR outsourcing services may provide complete and partial solutions as per their norms and the geographical area they are located in. Most importantly, the HR functions that are not confidential and yet critical to a company’s success are outsourced to other third-party service providers.
The role of HR
Human resources or HR is one of the core components of any organization. Any business requires effective management, and the same goes for human resources. Here human resources not only signifies the employees or the working individuals in the organization but denotes all the individuals related to the functions of the organization. HR outsourcing services help you to manage these resources effectively and provides a platform to manage them. Human resources outsourcing is a continuous and evolving initiative. HR outsourcing allows organizations to focus on their core competencies. Thus they are able to increase their productivity and efficiency at a more incredible speed. Some significant benefits of HR outsourcing services are:
Helping an organization to get cost and time-efficient
Providing cutting edge strategies to manage their resources
Improving the productivity of their employees
Improving the quality of service offered to the employees
Formulating and implementing strategies on an organizational level
The need for HR outsourcing
Companies worldwide need HR outsourcing services for the following reasons:
Providing businesses with the scope of focusing on the core operations crucial for the company’s growth and progress
Helps in direct and indirect cost savings
Create a stable management platform
Ensure the company meets legal, and regulatory compliance and employs best practices
Mitigate the risk and liability related to people issues
HR outsourcing categories
HR outsourcing can be divided into three broad categories
The application service provider (ASP)
Business process outsourcing (BPO)
Total HR outsourcing
The application service provider (ASP
Many companies provide hardware and software solutions to support more prominent companies. To support the human resource activities and effectively manage them, these companies have developed application packages such as HRMS.
Their technicians install these applications, and the companies provide support for running these applications. However, there are also some disadvantages to the application service provider.
One of the significant disadvantages of such HR outsourcing services is the costs that are related to these software packages. The licensing of these software packages usually are expensive, and you would have to renew the licensing after a certain period.
The second disadvantage associated with the ASP is that the successful implementation and installation of the software is not guaranteed.
Business process outsourcing
Business process outsourcing is a significant trend in the industrial and corporate sector these days. Business process outsourcing provides all the benefits of ASP. Moreover, the client will be connected to the employees managing their processes through call centers and support centers. Most MNCs tend to go for business process outsourcing as they provide ease of access, services for a fixed time, management and control of the employees directly under the company, and an ability to encompass excellent territorial services. Also, you can either choose to manage the BPO centers on your own or you can have them managed by their respective service providers. The BPOs have a fixed contract that spans over a certain period.
Total HR outsourcing
In this type of HR outsourcing, the company handovers their entire HR processes to an external service provider. Starting from the recruitment of the employees to the pay discussion, everything is managed by the HR outsourcing providers. Such types of organizations usually consist of only senior HR professionals. These professionals are regarded as the HR strategists of the service provider. The HR strategist is assigned the functioning of an entire company and supervises a team of individuals who carry out different tasks to strengthen the HR of that respective company. There are different types of activities carried out by these service providers that are directly and indirectly essential to the company’s growth. Total HR outsourcing is suited for companies that do not have much time to spend on the HR needs of their company. By investing in a complete HR outsourcing service provider, they can ensure that there would not be any hassles in talent management in their organization.
Human resources are certainly the most valuable aspect of any company. How you deal with the people and how you manage the talent within your organization determine the heights of success your company can reach.