Commonly Outsourced Human Resource Functions

Commonly Outsourced Human Resource FunctionsCommonly Outsourced Human Resource FunctionsGenerally speaking, human resources (HR) deals with anything and everything that has to do with people in a company. Unfortunately, this mindset can result in the HR department managing a lot of tasks that take time and energy away from the HR activities that provide the most strategic value to the company. For instance, an HR function like talent development is critical for a company to identify and groom its future leaders. However, payroll is a more process-driven task that can be outsourced effectively, thereby freeing up HRs time for the companys mission-critical HR needs. Its a matter of identifying which tasks HR should focus on to most effectively advance the companys mission and delegating the rest to responsible outside service providers. The outsourcing of HR has accelerated over the last decade and will continue to do so. Outsourcing allows companies to offload work that isnt part of t heir core business and it also saves money, she said. While some companies may entrust their HR needs to a single outside firm, its more common to parcel out functions to a range of outside providers. So how do you decide what to outsource and what to keep in-house? Step 1 Identify Key HR Initiatives First, its important for HR to let go of the idea that it can be all things to all people. Define HRs strategic role in your company. Go back to the basics and write up some good old-fashioned job responsibilities for HR. Focus on how HR drives the companys overall mission. Decide what HR tasks are special to your company and important to the culture. Step 2 Consider Which Functions Can Be Outsourced Any roles HR is currently managing that fall outside of the sweet spot you have identified should be considered for outsourcing. There are good outsourcing firms that can efficiently handle activities like relocation, temporary staffing, background checks, and drug screening. While behauptung processes are very important to the operation of the company, they do not drive the strategic mission of the organization. Even a critical function like regulatory compliance should be considered for outsourcing. HR compliance requires constant attention to stay up to date on the latest regulations and legal decisions. Most HR departments dont have that kind of expertise on staff. Outsourcing to a specialist can provide added insurance against the financial penalties and bad publicity that result from compliance gaffes like failure to properly classify independent contractors, for example. Step 3 Create a Team of Internal and External Specialists A company that enlists outside specialists to supplement on-staff talent is cultivating a strong team of HR professionals. In this era of lean management, most HR departments are not going to be able to have an on-staff expert to manage every HR issue. Step 4 Find a Trusted lebenspartner or Partners Concerned that youll c ompromise quality if you outsource certain HR functions? You can maintain control of important HR functions and help HR become a more efficient and effective player, but you need to find trusted partners. Do your homework. Compare benefits, the associated costs, and approaches of different firms. Conduct background checks to ensure the outsourcing firms reputation is solid. Be sure the Better Business Bureau accredits the firm, and talk to other companies that have used the firm. Read all proposals carefully. Make sure you understand the value you will receive in doing business with a particular vendor. Step 5 Explore a Plug-and-Play Solution One outsourcing option that works for some companies is to contract with a group purchasing organization (GPO). A GPO provides access to qualified, prior negotiated contracts with staffing firms, managed service providers and others. This arrangement can be a convenient, efficient, and cost-effective one-stop shop for a range of HR outsourc ed services. Companies avoid the time and effort required for negotiating and managing multiple contracts. The GPO vets the best suppliers, leverage relationships to secure competitive contracts, and helps a company secure the resources it needs. The majority of the GPO market in the United States is focused on healthcare procurement. The major GPOs in this space are making purchases more than $200 tausend milliarden annually for their hospital and related industry clients. There are no reliable statistics on the size of the corporate GPO market, which is newer, smaller and more fragmented, and in general more focused on procurement than HR outsourcing. According to a 2011 study by the procurement media site Spend Matters, 15-20 percent of Fortune 1000 companies are now using a GPO, and 85 percent of those companies reported savings of 10 percent or more. Step 6 Consider a Complete Outsourcing of HR For certain companies, it may make sense to consider a professional employer org anization (PEO). A PEO takes over all of a companys HR functions by literally hiring the companys employees and becoming their employer of record for tax and insurance purposes. The practice is known as co-employment or joint employment. Through a PEO, the employees of small businesses gain access to employee benefits such as 401(k) plans health, dental, life, and other insurance dependent care, and other benefits typically provided by large companies. According to the National Association of Professional Employer Organizations (NAPEO), approximately 250,000 businesses use PEOs. Outsource This and Not That There is no playbook for HR outsourcing. What functions stay in-house and which are outsourced to an outside specialist depends on the type of company, its strategic priorities, and the role HR plays in realizing those priorities. Here are the HR functions that are most commonly outsourced High-volume recruitingTemporary staffingBackground checks and drug screeningRelocationPa yrollBenefits administrationCoachingCreating/updating employee handbooks and policy manualsCompensation program development/implementationWriting and updating affirmative action plansProviding sexual harassment trainingIndependent contractor compliance These HR initiatives tend to stay in-house Employee relationsCompensation design and deliveryTalent developmentCapital strategy planningSuccession planningHR strategyPerformance managementOrganization developmentRecruitingHR department management Outsourcing some, or even all, HR functions is a proven and widely practiced concept among companies of all sizes. Outsourcing enables a company to focus on HR activities with the most strategic value while saving money and benefiting from the specialized expertise of outside firms.