The size of the HR department has increased considerably, as a response to both the growth and complexity of government regulations and a greater awareness that HR issues are important to the employee experience, the resulting engagement and the ultimate achievement of business objectives. In recent years, the compensation of HR specialists has increased faster than other jobs, reflecting greater awareness that a well-managed HR function contributes to a sustainable competitive advantage.
Keeping yourself abreast about what is happening in the industry (Industry trend, people changes, key movements in the industry) and when you share such ‘competition insights’ with your business heads, it paves the way for sustainable competitive advantage.
Multi-Tasking: Most small and even mid-sized businesses end up employing a “multi-tasking approach” to deal with the many aspects of HR management. This implies that somebody who is not an expert is trying to deal with the administrative burden of Human Resources. The result is that most of the time is spent dealing with routine tasks and not working on HR objectives.
Human Resources face countless challenges:
- Employee Benefits
- Time and Attendance
- Employee Development, Compensation, and Retention
- Workflow Planning, Analysis, and Reporting
Managing this vast amount of data is a complicated task for even the smallest organisation. Consequently, finding ways to increase efficiency and lower costs has become a central issue in HR departments everywhere. Automating the administrative tasks associated with this job can help companies achieve those goals.
Note: A common misconception is to think that Human Resources are an expendable part of your business plan, to think that HR expenses can be avoided without causing too much overall disruption or damage to your profit margin. It is easy to make such a misguided assertion but you may want to reconsider your perspective and think differently.
In many small companies, Human Resources is either forgotten or poorly managed, costing your company time and money.
HR involves mounts of work…
- Payroll Administration
- Benefits Administration
- Vacation, Sick Time, Expense Reimbursements
- Policy and Legal Compliance
- Employee Data and Records Management
- Recruiting, Onboarding
- Performance Management
- Training and Development
- Employee Relations / Employee Communications
Being proactive about understanding the nature of support your business heads would need from HR context, creates room for you plan your work and make it more effective as you understand the “why” part of your job better and deliver accordingly
A Human Resource Outsource solution
It is critical that all of your resources are focused on your core business.
“It’s understanding where your real value added is and putting your best people and resource behind that. We converted our back room to someone else’s front room and that is what outsourcing is all about.” Jack Welch, GE
Many firms now shift work once performed internally to outside suppliers and contractors, a process called outsourcing.
The motivation is simple: Outsourcing saves money.
The Wall Street Journal reports that more than 40 % of Fortune 500 companies have outsourced some department or service—everything from HR administration.
A survey conducted by the World-at-work Association (which has more than 10,000 members in responsible HR positions) found that the following HR practices are now completely or partially outsourced by a large proportion of participating firms: health and welfare (79 %), pension plans (90 %), payroll (62%), training (50%), and recruitment and selection (32 %).
A Human Resource Outsource solution provides an integrated approach for managing your organisations administrative and strategic HR activity, simplify processes and lower your cost of doing business.
Why do businesses outsource HRO services?
- Average median cost to administer HR internally for companies with less than 250 employees is £1200 – £1450 per employee per year
- 1000% increase in employment litigation, since early 2000
- 60% to 80% of an employer’s time is spent on non-productive administration
- 000’s of misclassifications resulting in back taxes and penalties
- More than 20,000 pages of employment regulations
Harassment and intimidation cases on the rise
- Sexual Harassment and Discrimination
- Wage Disputes and Hourly Disputes
- Wrongful Termination and Breach of Contract
- Negligent Promotion and Negligent Supervision
- Emotional Distress and Invasion of Privacy
- Over 70% of employment lawsuits are filed against small companies
- The median award for employment cases – £35,000
- Average Attorney’s fees for cases that settle before trial – £45,000
These are just some of the numbers that small businesses are faced with.
It makes business sense to allow people with the expertise and technology help you deal with these challenges streamline your costs, enhance productivity and high performance
An outsourcing arrangement can provide a wealth of benefits to your company. An obvious benefit is the time you will save by avoiding everyday administrative tasks and HR activities. Another benefit is that it will be more affordable to provide benefit packages to your employees. Using an Outsourcing arrangement can help you keep your best employees happy, and assist in recruiting top performers.
When it comes to government regulatory compliance, another benefit is that the service provider knows everything there is to know about labor and tax laws as to avoid costly penalties. Also can make suggestions for workplace policies and customise the way you run functions your business to help minimise liability, and save you money.
Focus on Increasing Employee performance thereby improving overall employee productivity.
Your focus area should be to help employees improve their performance at work, in their jobs and in their assignments; this directly impacts the bottom line of the business. This will also ensure you keep a check on the “manpower requirement’ of the business and manage “wage cost” for the business.
Utilising an HRO engagement can keep your organisation agile and efficient. The real value of HRO will be determined by its ability to deliver on business strategy through full client partnership.