Did you know that the global HR outsourcing market is soon expected to reach a staggering $45.8 billion?
The growing complexity of HR has greatly affected small businesses. Unlike large companies, they lack the luxury of professional HR administration.
So, many small business owners have turned to outsourced HR solutions. But, what exactly is outsourced HR, and how do businesses benefit from it?
Read on to learn all you need to about outsourced HR solutions.
What Is Human Resource Outsourcing?
HR outsourcing is a process in which a company hires a third party to perform its HR functions. Most companies outsource non-core services like recruiting, payroll, outplacement, and labor law compliance.
When you outsource your recruiting, you don’t need to worry about finding employees. Your chosen partner will handle job listing, screening, interviews, and onboarding.
The same thing goes for payroll and labor law compliance. You won’t have to dedicate valuable time to keeping up with payroll and labor law changes. Imagine all you can do when you don’t have this weight on your shoulders.
What Are The Benefits Of Human Resource Outsourcing?
Outsourcing HR services allows you to focus on core business functions. If you don’t have HR tasks, it’ll be easier for you and your employees to focus on long-term goals.
Outsourcing also helps your business remain compliant, thus avoiding fines. Keeping up with the ever-changing compliance demands can be confusing. But, outsourcing allows you to connect with experts who keep up with regulations.
You’d also be surprised by the amount of money you can save through outsourcing. HR outsourcing firms charge less than you’d spend on an in-house HR team. Their charges are also constant, thus allowing you to budget for your HR functions.
Another benefit would be having access to a larger and more qualified talent pool. There’s more to attracting eligible employees than posting jobs. If necessary, an HR outsourcing firm will go to the field to get qualified applicants.
What Are The Types Of HR Service Providers?
Your needs dictate the kind of HR outsourcing firm you need to hire. Some firms perform specific tasks, whereas others offer comprehensive HR solutions. Here are the most common HR outsourcing firms.
Professional Employer Organizations (PEOs)
PEOs act as co-employees or employers of record. They’re full-service organizations that conduct all employment-related functions.
So, a PEO will handle recruitment, payroll, workers’ compensation, and law compliance. Benefits of working with PEOs include reduced costs and increased employee productivity.
Note that working with PEOs doesn’t mean you won’t conduct HR functions. You’ll still need to review policies and make employment decisions together. You can learn more about PEOs here.
Administrative Service Organizations
As the name suggests, administrative service organizations provide administrative services. They build customized packages for each employer.
Your package will include the services you want to outsource. This means that you can keep some of your HR functions in-house.
Gain A Competitive Edge Through Outsourced HR Solutions
More businesses will move to outsourced HR solutions as HR becomes more complex. So, you will need to hire an HR outsourcing firm to stay on top of things.
Outsourcing HR services also allows businesses to focus on their core functions. This translates to increased efficiency and productivity. Business 101: How To Start An IT Company
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