What is the impact of Outsourcing on HR?


It’s nowadays a common term but what exactly is Outsourcing?

The definition is broad; Outsourcing is when a company contracts another provider to perform a process that normally is done internally. There are many different kinds of outsourcing services currently on the market, whether it is Payroll, HR, IT Support, Customer Service or Book Keeping, Legal, Web Design and Marketing services. Companies that want to reduce their amount of administrative work and improve efficiency often look to outsourcing as a solution.

Processes that are time-consuming and routine are ideal for outsourcing. By removing such an activity from within your company, your employees can focus on doing more efficient or productive things that are difficult or impossible to outsource leaving a dedicated external vendor to complete the job, accomplishing it more efficiently due to their process specialization.

With an outsourced Human Resources or Payroll Provider, you won’t have internal downtime in these tasks because of vacations and illnesses or have to spend time training new hires for the job. There is a large expense and time cost associated with performing in-house payroll with a very good chance that you can save money and reduce the time invested by outsourcing your payroll operations.

Employers looking to streamline their Human Resource Administration and cut costs should consider outsourcing Payroll as well as other HR functions such as employee handbooks, new hire reporting, recruiting new employees, and human resource compliance. With a focus on efficiency and cost effectiveness, it is important to consider a variety of factors to determine if outsourcing Payroll (or any other Human Resource activity) is the right approach for your company.

Outsourcing allows your employees to perform tasks which add to the bottom line; to train them to be focused entirely on growing your business in ways that add value beyond the task you are outsourcing. Because of these efficiencies, outsourcing is seen by employers as a cost effective and valuable solution to running the administrative part of your business.

If you deprive yourself of outsourcing and your competitors do not, you’re putting yourself out of business
– Lee Kuan Yew

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