Key Considerations When Outsourcing Your HR Functions

So you’re considering outsourcing some or all of your HR functions. Get this right, and you could dramatically improve the quality and direction of your HR function. Get it wrong, and you risk wasted resources and bigger issues than you started with. So what do you need to consider when outsourcing HR?

Should you outsource HR or keep it inside your business?

This often isn’t a simple yes or no question, because you might choose to designate certain functions to an outsourced HR firm and maintain others in-house. It’s worth considering the value of outsourcing HR functions on a service-by-service basis and having a discussion with a potential provider about the value they can bring. For example, will you gain the most from having:

• Those repetitive time-consuming admin tasks being taken care of?
• HR experts to consult when a challenging workplace conflict or issue arises?
• Overarching HR strategy guidance, to align your HR function with your organisational objectives?
• An expert eye managing your compliance?
• Independent mediator or workplace investigators who can provide objective services?

Perhaps you already have the internal resources to manage some of these functions, or perhaps it would suit best to outsource all of them to free up your team.

What are the pros and cons of outsourcing?

Why outsource HR functions in the first place? Let’s consider the pros and cons to help you clarify whether the decision is right for your needs.

The benefits of outsourcing HR

1. You’ll gain a fresh outside perspective for your HR needs
2. You can free up your internal team to focus on what you do best
3. You can access HR experts across a vast range of experience and expertise
4. You can better support existing HR staff in your team
5. You can improve your employee experience, engagement and retention
6. You could have peace of mind about tax and legal compliance
7. You can optimise your human resource functions, processes and infrastructure
8. You can switch outsourced services ‘on or off’ as you scale and evolve
9. You can streamline your overall HR costs in a flexible way.

The (potential) cons of outsourcing HR

1. An inexperienced provider could waste your time and resources
2. You could choose unsuitable HR tasks to outsource
3. You could lose control or visibility over important HR functions

Of course – these issues can be avoided by choosing the right outsourcing provider!

Which HR tasks can be outsourced?

When choosing which HR tasks to outsource, consider the following services and their potential advantages for your organisation:

• Workplace culture design and re-engineering
• HR process reviews
• Long-term HR strategy
• Compliance with workplace legislation
• Project-based HR, such as for a merger
• Coaching and leadership development
• Workplace investigations and mediations
• Assistance with employee terminations
• Performance management
• Talent attraction and onboarding, plus more.

What’s right for your business?

As a business owner or leader you’ll want to get maximum value from any outsourcing relationship. The best first step is to assess your needs and speak with potential outsourcing firms about the value they can bring. To speak with a wholly Australian-based team in Brisbane, Melbourne, Perth, Sydney, Parramatta or Newcastle, arrange your obligation-free consultation with performHR today.