Impact of HR Outsourcing on Businesses

Outsourcing is becoming increasingly common for both large and small businesses. Human resources (HR) is one of the fields for which businesses of all sizes most often outsource their work. Today, many employees access a lot of HR-related information online because of outsourcing. For example, employees can retrieve their payroll and benefits information easily via a cloud platform as long as they are connected to the internet


Benefits of HR Outsourcing

HR outsourcing benefits companies because of the principle of division of labour. HR tasks can be outsourced to firms that specialise in human resource management. These professionals are experts in HR and the technology used in the field. Investing in HR technology might not be a viable option for small businesses, but relying on the services of HR firms that have that technology is definitely an affordable choice for them.

By outsourcing HR processes, small businesses can concentrate on providing their services to customers without spreading themselves too thin. One of the reasons why only a small percentage of small businesses are able to stay in operation past the first few years is that small business owners can get overwhelmed easily by all the details of managing a business, including HR tasks.

If you outsource your HR work to a reputable and trustworthy firm, you know you are in good hands. HR outsourcing is also cost-effective for small businesses. Each HR specialist from the outsourcing firm can manage HR processes for the entire workforces of multiple small businesses. By engaging the outsourcing firm, each small business would only incur a fraction of the cost of hiring a full-time HR employee.


Concerns over HR Outsourcing

Many HR outsourcing providers locate facilities overseas to manage their clients’ HR processes in the provider’s home country. While this may save costs for the outsourcing provider, it also results in slower response time and unfamiliarity with local legislation where the client is based. Another concern is that a processing team based overseas may not be able to adequately safeguard the data security of local employees.

An SSAE 16 compliant HR outsourcing provider that manages clients’ HR processes locally and is familiar with local legislation would be well-positioned to address these concerns. Apart from ensuring faster processing and regulatory compliance, its SSAE 16 compliant status would be an assurance to clients that it has robust safeguards in place to protect the security of their employees’ data. It is therefore essential for businesses that decide to outsource their HR processes to examine the credentials of HR outsourcing firms.

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