Why HR Outsourcing Adds Value to an Organization

Outsourcing is as old as organized political and economic systems. Specific personnel were often contracted by the government to collect taxes in the ancient Roman Empire. During the Industrial revolution, rapid technological advances resulted in increased production. This advancement led to a shift from horizontal partnerships to complex, vertical relationships that were geared towards the attainment of the organization’s goals.

Human resource outsourcing entails the delegation of one or more human resource service(s) to an external provider, who owns, manages and administers the delivery of the services based on pre-determined performance metrics.  Outsourcing of human resource function(s) has become a common phenomenon globally. Organizations, regardless of their size, find themselves having to replace, supplement or broaden their operations by outsourcing aspect(s) of their HR functions.  Just like with every other business decision, the decision to outsource the human resource functions cannot be made without considering the contextual factors. The organization must consider the economic, social and legal landscape it operates in.

The strategic objectives and financial plans of the organization define the scope and direction an organization desires to take. This makes every outsourcing decision unique.  Some firms we have worked with in the past have contracted us to do psychometric testing or training. Others have outsourced their entire HR function to our organization. In spite the fact that making the decision to outsource HR functions is multifaceted and complex, organizations ought to embrace HR outsourcing for the following reasons:


1. Cost effectiveness

The current business environment is cost conscious and competitive.  The rapid changes in the external operating environment are making it necessary for organization to adapt fast. With the increased focus on profitability, organizations find themselves subjecting their   departments to cost reduction measures. HR demands oversight, innovation and resources but it does not directly give returns. Outsourcing human resources function (s) helps the organization focus on the core competencies. By outsourcing HR functions, the size of some of the HR functions can be reduced.  Innovative solutions can be implemented resulting in a reduction of the cost of executing these functions. The innovative solutions puts an organization in a better position to maintain a competitive edge. HR specialists that would otherwise be out of an organization’s reach due to the cost of hiring them can benefit the organization with their skills and expertise as external HR experts.


2. Enhances legal  compliance

Organizations grow over time hence the need for mergers, acquisitions and expansion. In light of this, organizations need structures and HR processes that are capable of blending of corporate cultures, handling layoffs and consolidation of employees. Outsourcing HR functions would appeal to an organization during a merger or an acquisition because specialized personnel would be superfluous after the completion of the project. Organizations must also comply with various legislations and regulations.

An external HR expert provides guidance that  enables an organization to set policies and procedures on health care, overtime compensation, pension reform and benefits eligibility. While this can be carried out by internal HR departments, keeping up with the regulations is demanding.  It may call for an increase in the number of personnel working in the HR department as well as the resources devoted to the department. An organization is better off hiring a subject matter expert to handle matters of compliance.


3. Implementation of  HR tech

Improvement of the quality of HR services calls for improvement of the systems as well as training of employees and managers. ICT solutions in HR assist in enhancing the quality of the employee-management relations.  ICT solutions ease HR functions such as leave-planning, appraisals, evaluations and health care insurance. Once an organization has a system in place, regular updates need to be done in line with the trends in the business environment. Some systems are only useful for a given period while others are embedded into the daily functions of the HR department. An external HR   expert can significantly reduce the financial burden associated with introducing new technological   solutions into an organization. HR tech solutions such as virtual workforce leadership and virtual analytics can be carried out for the benefit of an organization by an external HR expert.

Top five recruiting challenges HR professionals face and how to overcome them

Every HR professional comes up against certain challenges when they are trying to hire new workers. From not receiving resumes from candidates with enough experience to being unable to shift through applications effectively, many recruiters encounter numerous issues with acquiring new employees every day. However, there are some obstacles that many HR professionals must tackle in their search for great talent that are just emerging. These types of issues require HR representatives to adopt specific solutions and strategies if they want to improve their recruiting.

Here are five of these challenges and how to overcome them:

1. The need to make a Speedy Hire.

According to an article in HR resource ERE.net, one of the biggest struggles recruiters are starting to encounter is the need to make a quick hire. Many HR professionals had time during the recession to deliberate over candidates’ qualifications and conduct multiple rounds of interviews, but competition is heating up once more for great talent. In addition, many companies are growing so fast and need to fill multiple positions at the same time that recruiters no longer have a lot of time to recruit workers.

Solution: HR professionals should examine their recruitment tools, especially their software and employee management strategies. Recruiters can spend a lot of extra time trying to input candidates’ information into systems or speaking with managers about the specific requirements of a certain position. Ensuring all of the needed information is already documented and easily accessible can save recruiters some steps and cut down on their recruitment time.

2. Not having enough resources.

Many HR professionals have to make do with the resources they have, and sometimes there isn’t much to work with. While some HR departments are given large budgets to place ads across the Internet so job openings are in the hottest recruitment spots, others may have to use free job boards or take out space in more traditional recruiting channels. This can present big problems with finding qualified candidates.

Solution: Not every department can boost its recruitment budget, but HR professionals are able to examine where the best hires are searching for jobs. Platforms like social media can be great and affordable solutions to this issue for HR professionals, who can use their LinkedIn profiles, for example, to send out information about open positions to others on the social site.

3. Being unable to find the perfect candidate for a certain position.

HR professionals often see themselves stuck when they aren’t receiving resumes from candidates with strong backgrounds or skill sets needed for the position. Even if these recruiters reach out to passive job seekers, they may hit a brick wall in terms of finding the talent they need. This is an all-too-common problem for recruiters, but one that they are starting to face more often as the competition for key performers heats up.

Daniel Ha, founder and CEO of communications firm Disqus, told SmartRecruiters this was a significant problem his company encountered, especially since it had limited resources.

Solution: Ha said his company was able “to strike a great balance between hiring someone for position-need versus hiring someone that’s great regardless of position.” HR professionals need to get out of the mindset of hiring for a position rather than assembling superstar talent. While recruiters may have to fill a certain position, they should also be open to training and educating talented workers so they can acquire needed skills.

HR representatives can also adjust the position’s job description. According to Brazen Careerist, a job description’s wording may not correctly explain the position and its needs. Some of the qualifications may not be realistic for the position’s true requirements.

4. Understanding and using analytics effectively.

Big data may be a topic that’s old news to many HR professionals, but analytics remains a large challenge for many HR professionals. According to HR Den, being able to sort through and harness data acquired through human resource information systems and other types of technology can be difficult for HR professionals. Making sense of the collected data can be especially tricky.

Solution: HR professionals should work with data analytics experts or HR solution vendors to understand what various data points mean and how the department can harness them. Recruiters can then create cheat-sheets to help them understand how certain types of information can be used in the future.

5. Finding workers who fit the company culture.

New hires need to be able to integrate into a team and work well in the company environment, otherwise HR professionals will have to start the talent acquisition process all over again. Jennifer Barbee, founder and CEO of a tourism marketing company, told SmartRecruiters finding workers who fit the company culture was the business’s top recruiting challenge. This was an issue as well for Nathan Parcells, founder and CMO of InternMatch, who told SmartRecruiters his team had to let great candidates go because they didn’t gel with the team.

Solution: HR professionals should ensure they describe the company culture as best as they can in job descriptions. Displaying the company’s mission and aspects of its internal environment can help job seekers understand the organization better, which can ensure only those candidates who may fit well will apply.

Source: http://na.sage.com/us/articles/hr/five-recruiting-challenges