Advantages and Disadvantages of Human Resource Outsourcing Services
Companies that want to expand their workforce will need to work with their human resource team. For those who still do not have a fully integrated HR team, they may need to outsource.
HR Outsourcing Services
Human resource outsourcing services are comprised of several tasks that can be outsourced for a cheaper rate compared to hiring a full HR team. They are often preferred by startups who are still small or companies that just want a quick and effective fix for HR needs.
Why Outsource Human Resource Services?
Directly hiring a permanent HR person can be a solution, but that could present two problems. One problem is the cost that the client will need to pay for the hiring itself. The client will also need to pay for the benefits of the regular HR employee.
Another potential problem is that one HR person alone may not be enough to cover all of the responsibilities for current employees. There will be the added responsibilities of candidate research and interviews for hiring new employees, which could take more time away from the HR person.
It is better to have a full HR team that can take all of the responsibilities, but that would cost even more. There are even some companies that do have a full HR team, but they still decide to outsource some services in order to lessen the workload from the core teams.
Benefits of Human Resource Outsourcing Services
The most common benefit is that it is undeniably less expensive than direct hiring. Clients can choose to customize which HR services they need. They can just pick which services they need for an even cheaper rate.
Another advantage is that the client would not have to spend time and resources in finding a capable HR team. Outsourcing companies already have that covered. They have certified and qualified HR teams that can provide the HR services needed by the client.
There is no need for too much interviews and candidate searches. All the client has to do is to search for an outsourcing company and look at the services that they can offer. Once the terms have been agreed upon, the outsourced HR services can then start immediately.
The savings from the outsourcing can then be poured into other parts of the client’s business. It can be used to provide better benefits for the regular employees or to invest in new equipment for the office. Both of the options can lead to better morale and productivity for the team.
Benefits that can be increased include health insurance or health maintenance coverage. The company can then afford better packages for the employees. Retirement plans can also be made better for loyal employees. Leaves can also be increased since there would be additional budget for them.
Disadvantages of Human Resource Outsourcing Services
While it has all of its own benefits, HR outsourcing services still has some disadvantages. Since they are just outsourced, client’s employees can’t really reach a physical HR team in the office.
If there are altercations and confrontations in the office, it can be hard to resolve them since there would be no one to mediate. It can cause a strain in the office’s morale.
Communication could also be a potential problem. If the outsourced HR team is on the other side of the world, they may be susceptible to time zone differences and bad network connection.
HR offices also act as guidance centers for employees who want to vent out. Employees that need coaching can also approach a physical HR office for help. Without one, there might be a decrease in the company and employee relationship. Still, that would depend on the company’s culture in the first place.
There is also a possibility that other departments may be afraid that their teams might be dissolved because of outsourcing. This can dissipate trust fast if the client does not reassure them.
Outsourcing companies can offer help in determining what a client needs for their HR team. They can help set the HR outsourcing services that the client may need for their company. HR outsourcing services can make a big difference for a company if it is executed beautifully well and in the right context.