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How to Get the Most from Your HR Outsourcing Company

Posted by Tasnim Ahmed

September 18, 2020

Entrepreneurs who are pressed for time may consider outsourcing their HR functions, but many don’t know exactly how to get the most from these firms. Outsourcing HR responsibilities can be a cost-effective strategy that can help businesses improve their efficiency and provide comprehensive HR services to their employees.

An HR outsourcing company can manage a whole range of HR functions, including payroll processing, benefit plan management and administration, recruiting, training and more. Here are all of the HR services an outsourcing firm can provide entrepreneurs to help their businesses thrive.

Analytics for Decision-Making

Your HR outsourcing company can provide you with valuable insights on employee performance and satisfaction, as well as information about what influences their productivity and motivation. Thus, managers can spend more time on performance reviews and developing strategies for increasing employee efficiency and productivity.

Streamlined Recruitment and Onboarding

An HR outsourcing firm leverages technology to make your recruitment process streamlined and efficient. Your outsourced HR experts can help you hire and retain the right fit for any role. They can also facilitate the onboarding and training process to ensure a smooth transition for new employees. These HR experts can help you make many hiring decisions such as where to post your job ads, how to find your target candidates and how to structure the onboarding process.

Cultivate Positive Workplace Culture

Outsourcing HR services can help you evolve your workplace with new technologies and avoid office environment issues. It provides team members with a central location where they can get all of their answers, no matter where they are. Outsourcing HR services can help you create a culture of clarity that promotes trust and encourages transparency in the workplace.

Your outsourced HR experts can help you establish a work culture based on your business needs, such as flexible working hours, remote work options and more. They can also help you build a code of conduct, establish workplace protection rights, communicate company policies clearly and make sure your employees comply with the processes. Creating a workplace in line with federal, state and local laws for safety and health provides legal protection for your company and ensures a better employee experience.

Build an Employee Wellness Program

HR outsourcing organizations can help you introduce stress-reduction activities for employee wellness programs. These can allow you to offer holistic health benefits to your employees with competitive health insurance based on labor market trends.

Boost Compliance with Employment and Labor Laws

Your outsourced HR experts can help you comply with the current local, state and federal employment laws and regulations. They can keep you up to date with ever-changing health care legislation, leave laws, retirement plan requirements and applicable regulations. The team of HR experts ensures that you remain top on the tax and reporting deadlines and the most recent changes. Outsourcing HR activities to a professional HR consultant can help you minimize exposure to legal risks associated with HR practices and avoid any legal implications.

Benefits Administration

Offering attractive and comprehensive employee benefits plays a critical role in recruiting and retaining top talent. Outsourcing compensation program development and its implementation can help you provide better benefits packages. In addition, it is one of the most commonly-offered services by HR outsourcing companies.

Efficient Payroll Management

Your outsourced HR team uses the latest software and tools to successfully fulfill payroll functions like wage computation, overtime payment, incentives, rewards management and more.

Develop Training Programs

HR outsourcing organizations can ensure that your employees have the skills needed for the future of work. They can help your employees grow and develop their skills as your company scales. They can also set up a fair process for training, promotions, compensation and benefits reviews.

Establish Performance Review Process

Periodic employee performance evaluations are very important in terms of growing your employees’ responsibilities and ensuring that everyone is on track for their career goals. This can be accomplished by tracking employees’ goals and establishing a performance evaluation process. Outsourced HR services can help you set up such a system.

Risk Management

Many HR outsourcing companies can provide you with risk management tools via constant updates and knowledge of the risks that a company could potentially face. They can also help you establish a system for gathering employee feedback to address staff concerns.

Create Customized Solutions

Employee requirements differ from business to business. Outsourcing HR functions can help you get customized solutions that match your HR requirements and are tailored to your specific needs and team size.

Carry out Background Checks

Today, businesses employ workforces from different countries, which involves several legal processes like verification and other documentation. By outsourcing HR services, you can find reliable and best-fit employees, anywhere from around the world, with a quick background check.

Creating, Updating Employee Handbooks and Policy Manuals

A handbook helps your employees understand your vision for the company and how and when they can work. An employee handbook defines your policies, procedures, processes, benefits and more, and outlines the kind of culture you want to create. It confirms that employees and employers are on the same page and aren’t confused about new policies. The handbook will also help you answer many basic employee questions. Drafting an employee handbook in the early stages of your startup sets you up for success and helps you handle workplace disputes and conflicts. An outsourced HR firm will help you create HR plans and policies based on your business’ needs.

Get a Human Resources Information System

The right human resources information system (HRIS) can simplify business processes for both you and your employees. The HRIS can help entrepreneurs track employee time, manage payrolls and benefits, handle time off requests, keep records and much more.

Scaled Infrastructure

Outsourcing your HR services gives you access to the best in IT to grow right along with you. Instead of bringing on new HR team members as you grow, the outsourced firm will add services as you need them so you can optimize your operations.

Benefits of Outsourcing HR Functions

According to The National Association of Professional Employer Organizations (NAPEO), small businesses that use professional employer organizations (PEOs) grow seven to nine percent faster, have 10 to 14 percent lower employee turnover and are 50 percent less likely to go out of business.

Outsourcing HR functions to a reputable HR consultant can be a cost-effective, time-efficient, and expertise-effective solution to upgrade the organization’s core competencies. Entrepreneurs can enjoy the following benefits as soon as they outsource their HR services.

  1. Save Money

    – You can significantly reduce the cost of hiring full-time HR professionals or consultants. In addition to saving money on staff salaries and office space, you can also save the expenses of training, technological equipment and software required for your HR team.
  2. Free Up Your Time

    – You can focus more on managing your team and handling your core business processes with the confidence that your HR activities are being handled correctly.
  3. Reduce Operating Costs

    – You can avoid financial penalties related to non-compliance with employment regulations. You’ll also save because you will only pay for the services you use.
  4. Increase Productivity

    – Outsourcing HR activities can take the day-to-day administrative tasks off of your team so they can focus on revenue-generating responsibilities.
  5. Boost Compliance

    – You’ll stay compliant with the local, state and federal employment and labor laws.
  6. Improve Efficiency

    – By outsourcing the HR functions, your staff members can spend time doing what they do best, which often involves sales, marketing or product development.
  7. Access to Expertise and the Latest Technologies and Tools

    – Outsourcing HR services provides you with expert advice and the latest HR tools and software at no additional cost.


Tasnim Ahmed
Tasnim Ahmed

Tasnim Ahmed is a content writer at Escalon Business Services who enjoys writing on a multitude of subjects that include finops, peopleops, risk management, entrepreneurship, VC and startup culture. Based in Delhi NCR, she previously contributed to ANI, Qatar Tribune, Marhaba, Havas Worldwide, and curated content for top-notch brands in the PR sphere. On weekends, she loves to explore the city on a motorcycle and binge watch new OTT releases with a plateful of piping hot dumplings!

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