HR Outsourcing Companies

Avoiding Common HR Outsourcing Mistakes

by admin on March 22, 2011

Outsourcing your HR department can be very beneficial to your business. On the other hand, it can cause major problems down the road if you do it incorrectly. In order to help myself better understand this issue I’ve spoken to colleagues and HR experts about the potential pitfalls of outsourcing this part of my business. What I’ve learned has turned out to be very valuable information. In this article I’ll share that information with you, so that you might benefit as well. To get us started, here are the four most common HR outsourcing mistakes as explained by my sources:

having unreasonable expectations
weak leadership
failing to establish clear channels of communication
failing to plan for various scenarios

Unreasonable Expectations

Handshake and teamwork by rosalxxi

One of the most import of things to understand about human resources is that this one area of your business which is completely different from anything else. HR departments deal with people, not with equipment, machines, or other inanimate objects. This means there is greater potential for things to go wrong and a greater need for flexibility and understanding.

For example, it’s easy for me to say to an IT vendor that I expect 99% uptime for all network functions. However, 99% “uptime” for my employees is more than likely an unrealistic expectation. A good rule of thumb is to not expect the HR vendor to exceed what we can do ourselves. Rather, we expect him to do it more efficiently and cost-effectively.

Weak Leadership

As business owners and managers, you and I are ultimately responsible for all aspects of our businesses, including the areas we outsource. Therefore whoever is responsible in our organization for overseeing HR function is also responsible for maintaining leadership and ensuring the vendor meets objectives. If the vendor is unclear about those objectives, it is the role of the leader to help the vendor refocus and gain a full understanding of what is expected. Outsourcing the HR function does not relinquish the management team from continuing to develop the team. They must still perform many of the day-to-day tasks such as team building, face to face meetings, feedback solicitation and skills development which cannot be outsourced. Poor leadership often leaves the vendor scratching his head, and that’s never good for business.

Communication Channels

Establishing clear channels of communication is absolutely essential in any outsourcing situation. In order to avoid misunderstandings, conflicting instructions, and other communication issues, establish in your contract clear lines of communication. Those in your company whom you have established as communication points need to be diligent about such communications at all times. And remember, the fewer layers of communication present in outsourcing situation, the less potential for misunderstanding.

HR Manager by Payroll.bookkeeping

Planning for Multiple Scenarios

Because HR function is affected at every turn by the human factor, it’s much harder to envision potential problems. When problems do occur, the human element often makes them more difficult to solve than if you were dealing with a piece of machinery. At the outset of an outsourcing relationship with an HR vendor, senior company management should meet with the vendor to hammer out as many different scenarios as possible. Putting in place plans to deal with those scenarios makes it that much easier to do when the time comes.

{ Comments on this entry are closed }

Benefits of Outsourcing Your HR Function

by admin on March 22, 2011

Government estimates indicate that for every business in America that succeeds, five more fail. The biggest reason for such widespread failure is a lack of internal resources; a scenario which gets more complicated as the modern business environment and government regulation evolve. Now more than ever, outsourcing is a way to meet the growing demands of business even with limited resources. Human resources outsourcing, for example, is one of the big ones.

handshake by galleryquantum

Human resources function is one of the most basic building blocks of business. Because of this, many business owners and senior management are reluctant to outsource this department, fearing they will lose control of such an important asset. If this sounds like you you’re not alone. But continue reading and I’ll give you five benefits of outsourcing that just may change your mind.

Avoiding Government Red Tape

With every passing day that Washington is allowed to continue functioning, the business environment becomes more and more complex. The new healthcare law is just one example of how keeping up with government red tape in the HR department is becoming night to impossible. By outsourcing your HR function you’re giving the work to experts whose job it is to know these regulations and how to implement them in your business. Personally, I would prefer outsource rather than risk running afoul of the law.

Developing Policies and Procedures

Another specialty of HR companies is the development of policies and procedures. Often times it’s easier for a vendor to do this because he can see your business from the outside looking in. Developing comprehensive procedures and policy manuals not only can save you plenty of headaches later on, it may also be a legal requirement depending on the scope and nature of your business.

HR Outsourcing by hroplus

Recruiting Made Easier

Recruiting new employees can sometimes be an arduous and unpleasant task. This is especially true for owners and managers who are already hard pressed for time. When the hiring process starts feeling this way, it’s easy to simply hire the next person that comes walking through the door so you can get back to doing other things. An HR company is much more likely to recruit for you on a much more thoughtful and stable basis.

Payroll Management

Along with avoiding the government red tape is the ever-changing requirements of meeting payroll. Keeping up with the changes in tax law, as well as individual circumstances like child-support withholding, wage garnishment, and the like, make modern payroll processes a virtual maze. Navigating them without the proper knowledge could land you in trouble with the IRS. Thankfully your HR vendor has the expertise and is well-suited to the task.

Benefits Packages

Many HR outsourcing firms can provide you with a variety of benefit packages to choose from. Also, because they represent such a large number of employees they can often get you better rates than you could get on your own. Simply for the benefit packages alone, HR outsourcing makes good sense.