4 Compelling Reasons for Outsourcing HR Functions

4 Compelling Reasons for Outsourcing HR Functions

Should I outsource HR functions for my business? Does hiring a company to handle our payroll, benefits, and other HR tasks make financial sense? Why can’t we just manage HR-related duties internally or with the people we already have?

Do any of these queries ring a bell? If your small to medium-sized business is expanding and you’re recognizing you don’t have the resources you once did to meet your HR demands, they might. Yes, you should think about outsourcing, to answer your questions.

Simply put, the greatest method to support your company’s continued growth while preserving compliance, keeping your employees satisfied, and managing your costs is to outsource your HR to the right partner. You must consider HR outsourcing if you want to expand your efforts, develop your workforce, and increase your revenue. Why? Read on.


Why Should You Outsource HR Services?

Outsourced HR services provide plenty of advantages and benefits to a business. This service is a big factor when it comes to generating productivity for a company. Here are some reasons why SMEs and big corporations are considering doing outsourced HR services into their businesses:

  • You’ll Gain More Financial Advantages

    HR outsourcing is a cost-effective way for SMEs & large companies to save a significant amount of money. This significantly lessens the need to have an in-house HR department. Which in turn lessens the need for equipment, personnel, and space.

  • You’ll Have a Dynamic Hiring Process

    Sometimes, companies need to hire skilled employees, and this could eat up a lot of time and resources just to find the right talent for the job. Fortunately, HR outsourcing companies are specialized in this field. They already have a big talent pool to source from while also having more than enough capacity to find new talents that fit a business perfectly.

  • You’ll Achieve Efficient Scalability

    If a company is greatly invested in its in-house HR department, chances are, it will have to focus on it more. This greatly reduces the chance of actually having constructive growth for the business. The more time one spends in a non-core business function, the less one can spend on core business activities that could scale the company.

  • You’ll Experience Ease of Compliance

    There are a lot of compliance regulations in different countries that make it difficult for companies to expand their business. The beauty of an HR outsourcing company is that they provide everything a business would need to ensure proper compliance and also promote employee loyalty to reduce turnover.


What Type of Outsourcing Model is Right for You?

If you don’t want to hire an in-house team of Human Resource talents, then you should find out more about outsourcing and its types. There are three known outsourcing models to choose from—onshore, offshore, and nearshore outsourcing.

1. Offshore Outsourcing

This means hiring a team of professionals outside your country in a distant location. The most popular countries for offshoring are the Philippines, India, China, and some countries in Western Europe. They have a lot of qualified professionals, and the main benefit is the low hourly rate that allows for cutting expenses significantly. You can discuss with the team any project-related matters through different mediums such as chat, email, or phone. Time zone differences are also advantageous for businesses that provide round-the-clock customer care.

2. Nearshore Outsourcing

This is quite similar to offshoring, but the main difference is that you hire professionals from countries located closer to your home country. The main upside is also the minimal time zone difference, which is no more than a couple of hours. Nearshoring is more convenient as there are fewer cultural differences and communication which turns out to be much more effective and smooth.

3. Onshore Outsourcing

This is also called homeshoring as it means hiring professionals from the country where your business or company is located. It’s incredibly practical because contractors may closely watch the development stage and immediately adjust the procedure. No cultural, linguistic, or time zone variations are anticipated, but you should be aware that onshore professionals are substantially more expensive.

Choose an option that will be the most appropriate for your business and aligns with your budget and product goals.


Considering Outsourcing Your HR?

Before outsourcing to an HR company, you need to balance what you can afford with what your company needs to provide to achieve the desired outcome. A startup will have different needs and use different tools to attract talent – compared to a mature company or large enterprise looking to exponentially scale its growth.

Learn more about HR outsourcing. Get in touch with us and our team of experts will gladly help and walk you through the process and how you can get the most out of your outsourcing experience.

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