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Why
should my organization Outsource HR functions?
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human
resource
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HR
Executives are outsourcing their companies' day-to-day human
resources functions, to be able to focus on strategic issues
like globalization, organizational development, executive
succession, workforce planning and compensation policies.
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Outsourcing
can free valuable management time and energy that can be better
spent on strategic planning initiatives that add more value
to the company, rather than program administration with all
of its many complexities and details.
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With
the high risk involved with allocating limited resources to
non-core functions, outsourcing gives companies the option
of reducing the investments associated with IT expenditures
for human resources.
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| Will
employees benefit from HR Outsourcing? |
| human resource
logistics |
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Employees
have come to expect efficient, responsive services that meet
their individual needs. They want ease of access to address
life event changes such as marriage, children, college, career
moves, savings plans, retirement funds, health plans, and
other benefits.
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Outsourcing
can improve employee services is through today's new self-service
technology. This allows employees to update their benefits
elections, retirement contributions, and payroll deductions
over the Internet. Not only is this technology more efficient
for employees, who get timely and accurate information, but
it reduces the company's costs as well. Also, it allows management
to focus more time and attention on building its core business,
rather than be tied down with back-office administration.
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| What
are the HR outsourcing categories? |
| human resource
logistics |
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outsourcing services generally fall into the following categories: |
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PEO - Professional Employer Organisation |
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Also
known as employee leasing firms, a PEO hires your employees,
and takes full legal responsibility of paying them, administering
benefits, and notifying you of pertinent workplace regulations.
The PEO and business owner become partners, essentially, with
the PEO handling all the HR aspects and the business owner
handling all other aspects of the company. The business owner,
however, still maintains control of the day-to-day operations.
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By
proper definition, a service is a PEO when it takes legal
responsibility of employees, but a lot many HR outsourcing
services like to use the term "PEO" even when they
handle only the primary aspects of HR like payroll and benefits.
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HR BPO - Human Resource Business Process Outsourcing |
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An
HR BPO would make sure a company's HR system is supported
by the latest technologies, such as self-access and HR data
warehousing.
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HR ASP - Human Resource
Application Service Provider |
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HR
Application service providers host software on the Web and
rent it to users. Some offer packaged applications while others
offer customized HR software. These software programs can
manage payroll, benefits etc.
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If
you opt for an online service (ASP/e-service), you don't have
to purchase software, install it, and worry about configuring
it. An ASP business model is hosting software, so you don't
have to bother with additional software or installation.
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| What
are the key factors that need to be in place for HR outsourcing
to succeed? |
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Mutual
trust is critical, as it's a long haul commitment. For this,
it is imperative that senior management is not only involved
from the beginning but also preferably drives the initiative.
A clear understanding of requirements and expectations on
both sides is an important platform to build the relationship.
Compatibility in culture and values and an open and flexible
approach also help in ensuring that both organization and
service provider stay long-term partners.
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