subject: When Is It The Right Time To Outsource The HR Function In Your Organization? [print this page] When Is It The Right Time To Outsource The HR Function In Your Organization?
Building a successful and profitable organization is not an easy task. There are huge costs involved in setting up a new business. Huge analysis and extensive research is carried on before you set up a business that is not only profitable but has longevity too. Various companies, at the time of start up, undertake the fundamental processes involved in setting up of business, on their own.
Right from operations to accounts to marketing and hiring, all the processes are carried on internally. But as business expands and the organization enters the growth stage of its life cycle, there is a rise in demand for productivity and the quality of work has to improve too. In order to meet the growing demands of business, more people are brought on board and this in turn means heavy expenses for the company. One of the most onerous expenses for the company is employee turnaround. As the business expands, most of the managers and owners of businesses have complained that almost all of their productive time is spent in recruiting, training, and solving employee related issues. The more the business expands; the growing concerns of employee dissatisfaction come into light. No organization can sustain for long if the most important resource the employees are dissatisfied.
The human resource department in any organization is the backbone of the organization, especially when the business is expanding. The HR Department has a lot of roles and responsibilities to handle. Issues like hiring employees, employee on-boarding, compensation and benefits administration, performance management, regulatory compliance, et al are the major responsibilities that the HR generally has to deal with. People management is a specialized field that needs expertise. Most companies do not pay attention to what their core competency is, and end up spending extensive amounts of funds for acquiring the right kind of HR. They focus all of their resources on handling and dealing with the personnel issues. The owner or manager in question, in such a condition, needs to take some important decisions. The most important question that has to be answered is How does the organization acquire HR expertise in the most cost effective manner'? This is the point when it is necessary to outsource the entire or a part of the Human resource function.
Human resource outsourcing is an ideal situation for a growing organization, especially when they want to channelize all of their resources in the direction of expansion, rather than dealing with trivial issues of recruitment and compensations. Companies that undertake outsourcing provide experienced and committed human resource professionals whose main responsibility is to handle HR functions for an organization that is moving in the direction of expansion and progress. This way, the business can concentrate fully on their core activities and divert their resources towards increasing productivity and thereby profitability in the long run.
Most of the organizations have come to realize the various benefits that are being offered by human resource outsourcing. Even if your organization is not a big one, your employees can still be offered great benefits, good compensation plans, reward programs and many such benefits that are enjoyed by Fortune 500 companies around the world. Human resource outsourcing is now a mature industry which is a direct consequence of the increasing trust that companies have placed in the HR outsourcing process. The concept of HRO has been there for sometime now, but its growth and popularity has taken the world by surprise over the last couple of years.
In just five years from its introduction as a creative concept, human resource outsourcing has become an effective business solution for most of the early adaptors of this process around the world. Two of the main reasons why HRO has become such a popular and successful concept are low labour and operational costs; and the efficiency with which tasks are brought to completion. It is a specialized function that has lately been given the due recognition it deserves, thanks to the many benefits it offers to small and mid-size Corporates, given that they are the ones who most need to concentrate on expansion and growth.
