“The important thing about outsourcing… is that it becomes a very powerful tool to leverage talent, improve productivity and reduce work cycles.” – Azim Premji
When it comes to human resources, should you outsource select components, or the entire function?
It depends on your organisation’s specific needs. But many businesses are benefitting significantly from the access to HR expertise, flexibility and growth that often result from outsourced HR.
Why outsource your entire human resources function?
10 compelling reasons below.
1. Outsourced HR allows business leaders to focus on core functions.
You’re good at what you do, but it’s easy to get bogged down in the day-to-day tasks, putting out spot fires as they appear, rather than prioritising what’s important. When you utilise an outsourced HR provider, it allows you to spend more time focusing on tasks and activities that add strategic value to your business. We understand what great people strategy looks like, and we have the capability to deliver it, freeing up time and resources for business leaders.
2. You’re too close to the issue.
You may well be standing too close to your HR function, key people, systems and processes to see what’s really working well and the opportunities for improvement are. Human resources at its core is about maximising your people potential. Having an outsider’s perspective, together with a detailed knowledge of your HR systems and processes, allows us to make decisions in your best interest with clarity.
3. You have access to experts in every field.
If you have a large organisation, you can probably afford to hire subject matter experts across the many subsets of human resources. But let’s face it, hiring someone for multiple disciplines is very expensive and it’s unlikely that you’ll find a single HR professional who excels at all eight subsets of HR. At best they’ll be competent, or excel at one or two things – but since when has competent been an aspiration? You should expect more from the HR function.
4. We bring years of experience.
When you work with a HR outsourcing company, you get instant access to years of experience to support the needs of your business. Unlike a typical internally resourced HR function, as an outsourced HR provider, our team works on multiple portfolios of diverse clients across different industries each day. The benefit of this? We are exposed to fresh solutions and ideas on a daily basis, resulting in a new approach to old problems and the redefinition of what ‘great’ looks like for your business. We are data-driven and are obsessed with achieving the desired results for our clients.
5. We are nimble.
This year, more than ever before, we have seen the need for agility when it comes to business decision making. By working with an outsourced HR provider, you have the flexibility of changing the level of support as required. Having access to HR experts when you need it, means that your resources are fully utilised, and there’s no need to upskill or dismiss employees as your business needs change. You can simply turn it on and turn it off as you please.
6. You maximise your resource utilisation.
If you hire a HR generalist in your smaller business, you might only need them for 20 hours a week. Even if you’re able to hire staff with high competence in certain areas, it’s likely that as a small business your utilisation will be massively skewed. Outsourcing your HR to a truly full-service agency means you get 100% utilisation and the right blend of expertise at the right ratios. For instance on a typical client engagement, we may deploy HR specialists, organisational culture experts, internal recruiters, Employment Relations specialists, solicitors and Learning & Development professionals to undertake the work as required. Can you imagine how much it would cost to retain this sort of talent on your payroll or engage each professional separately!
You will also avoid the following expenses:
- Recruitment fees
- Payroll tax
- Paid leave
- Redundancy & long-service payments
- Office costs
7. Finding the right internal HR team can be challenging.
We know the importance of building a highly skilled team. As a company with consultants delivering to clients nationwide, it’s important that we get it right.
With the needs of a business constantly changing and a demand for skills across a wide range of areas, it can be hard to fill this capability internally. We spend the time developing our team and utilising subject matter experts so that you don’t have to.
8. We focus on what’s important.
With any organisation, internal HR can be distracted by internal politics, taking time away from focusing on strategic goals. It can be easy to lose traction on important tasks as people are weighed down by the daily happenings.
When you work with the right outsourced HR provider, your unique culture, objectives and environment are learnt to provide personalised solutions. We work as one and we’re incredibly focused on working towards your goals with only success in mind. We find out what’s important to you and strive to deliver on this.
9. Outsourcing can elevate your organisation.
Business leaders are recognising more and more the benefit that outsourcing can provide to their organisations. As shown by IBISWorld’s 2020 report, the impact of COVID-19 has meant that many businesses are looking to outsourcing services as a result of reduced employee numbers and to reduce costs.
10. It’s important that you find the right outsourced HR provider.
HR is high on the list of activities that shouldn’t be left to just anyone. The right HR provider can enable your organisation to meet its strategic goals and unlock the business’ potential. By working with PerformHR, you have access to a team of HR consultants and subject matter experts who ensure that best-practice HR is evident throughout your organisation.
So, should your organisation partner with an outsourced HR provider?
Your HR provider should be identifying inefficiencies, streamlining and cutting the fat to get best out of your people to maximise your returns.
We’re not saying that every organisation should outsource their entire HR department – many of our clients have internal HR capability, and that works well for them. However, for certain organisations, the benefits are significant.
Five signs that outsourced HR could be right for your organisation:
- Your HR staff are under or over worked.
- You don’t know what your HR team are doing.
- You’re not progressing with your strategic goals as quickly as you should.
- You don’t know how to take the next steps in your organisation.
- Your internal HR team need extra support.
Ultimately, the choice of whether you insource or outsource your HR needs will depend on your distinct requirements, resources and approach to HR. A mix of insourcing and outsourcing might even be best suited, with ad hoc support from an external team when and as needed.
If you’re not sure yet of what you need, we can help you navigate your decision. A PerformHR Strategy Session can help to identify the weaknesses and opportunities in your HR strategy and structure and develop a roadmap for strategic human resource management that will be tailored to your current and future needs.