The role of HR has evolved significantly. What was once considered a function purely reserved for administration and recruitment is now a pivotal influence in an organization’s long-term success.
The Evolution of the HR Function
HR as a department has largely put employees and teams at the forefront, often doing so as a way to keep staff connected and engaged with executives and directors more closely. However, it’s not black and white; the old-school ethos of ‘management knows best’ has largely faded into obscurity. In its place is often an employee-centric culture where creativity, communication, innovation, and ideation are all embraced and encouraged. This large-scale change has primarily been driven by HR leaders.
It would be fair to say that this employee-first approach is very much welcome in organizations. A recent survey pointed out that employees found increased communication, brought on by the pandemic, had a knock-on effect on company culture. HR teams should rightfully be thanked for being instrumental in bridging those gaps.
However, that doesn’t change the fact that HR teams can still face heavy workloads, with professionals often occupied by routine tasks that divert attention away from higher-value, strategic work. With a plethora of automation and time-saving software and tools available, we have seen administrative, laborious and repetitive tasks being entrusted to technology. With tasks ranging from data collection to accounts management no longer needing heavy human oversight, it begs the question of how HR teams can be liberated from more arduous tasks that eat up hours of their working weeks.
Outsourcing certain HR functions is another attractive option for forward-thinking companies. For tasks that still require human supervision, outsourcing proves to be highly effective and time-saving, freeing up HR professionals to dedicate more resources to tasks like leadership development, talent management, and strategic direction. Outsourcing also provides reassurance that certain duties are handled by professionals like virtual assistants and agencies, and not autonomous technology. In turn, this can improve efficiency and potentially save companies significant amounts financially.
As we look ahead to 2024, let’s explore five crucial HR functions that can be outsourced without coming at a hefty expense to an organization’s time, budget, and resources.
1. Payroll processing
Payroll is a compliance-driven process that requires employers, or more recently, HR teams, to be knowledgeable about all tax laws. Mistakes and anomalies can open businesses up to fines and scrutiny, and affect their reputations. Payroll processing for HR teams, however, is something rather routine that consumes time which is best served on higher-value tasks.
Outsourcing to authorized, accredited, and reliable payroll providers delivers peace of mind that paychecks will be delivered promptly. Many firms will offer self-service portals for their clients, so HR teams can periodically check and receive support if needed.
2. Benefits administration
Managing employee benefits packages involves several moving parts simultaneously. This includes healthcare plan management, pensions, retirement, vacations, and many others. Outsourcing this administration lightens the load on strategic and forward-thinking HR teams and leaves these tasks in the hands of capable third parties.
Benefits administrators can ensure compliance with laws and regulations while overseeing all enrollment, change reporting, support, and time off requests. This will free up internal HR staff to dedicate more time to managing employee relationships and overseeing their continued professional development.
3. Recruiting support
Recruitment activities are highly administrative and require constant attention, particularly at times when the business feels thin on the ground. Recruiting functions involve people with specialized expertise to source, engage, and evaluate qualified talent to fill vacancies. This is all the more complex when balancing changing employment expectations and easing concerns during corporate transactions like takeovers, mergers, and acquisitions.
As far as onboarding and recruitment go, entrusting this to third-party agencies will alleviate much of the administrative burden on HR teams. Entrusting capable recruiters to source candidates, conduct initial interviews, initiate background checks, administer tasks and resume screening, will provide much-needed breathing space for HR to focus on higher-priority employment activities. While the upfront and retainer fees may be higher, it will mean that your organization’s productivity will not be affected as severely.
4. HR information systems
HR teams often rely on a range of information systems like talent management software and compensation benchmarking tools, to name a few. While you can often find all-inclusive software that ticks many boxes, sometimes it’s more effective to have these processes overseen and implemented by experienced administrators.
Outsourcing this admin will make HR staff feel less burdened by the responsibilities of scaling software to suit companies undergoing rapid growth or expansion. Instead, an outsourced provider can deliver bespoke software that integrates with other systems. They can also oversee the setup of all new employee profiles as recruitment continues, and patch software with routine updates to safeguard data and information. This frees up the team to focus on the strategic direction and goals of HR technology.
5. Training and development administration
Employee development and training are vital for engagement, retention, and performance management. However, coordinating logistics such as enrollment, upskilling and tracking for training programs involves lots of administration, which can quickly add up when trying to enroll large teams or departments. It’s been reported that many SMEs prefer outsourcing their learning and development (L&D) processes.
Outsourcing this to third parties ensures that training programs are delivered autonomously and as intended, so the internal L&D team can focus on high-value work. Internal HR administrators can spend time curating the design and delivery of the program, and post-training reinforcement, while outsourced providers focus on fulfilling those goals.
When outsourcing makes sense
Outsourcing any business function requires thoughtful evaluation and should not be done on a whim. The decision should be based on various means-tested factors that determine a definitive need for outsourcing.
For instance, a scenario when outsourcing an HR function may make sense would be as a cost-saving measure. Economies of scale allow outsourcing firms to perform activities more efficiently and without high overheads. HR teams burdened with heavy administrative workloads will often be grateful if outside firms can provide support until staffing levels balance back to optimum levels.
Outsourcing to outside firms – even if only temporarily – can also allow HR teams to reassess and evaluate how processes are conducted and make gradual, long-term improvements. These may need time and resources to determine, which, if not occupied by hours of routine tasks, can be put to better use.
Fundamentally, however, HR employees’ satisfaction and engagement are just as important as staff in any other department, so it makes sense to consider how they can feel more reassured in the workplace.
The future of HR is strategic
The accelerating pace of technology and globalization will continue to change how HR teams and professionals work. However, the salient point is that forward-thinking HR leaders rightfully recognize the benefits of outsourcing when needed, as time or resource stretched in-house teams can only do so much. Delegating tasks must be done at various stages throughout an organization’s growth journey, so entrusting reliable vendors at the right time is not a move to be vilified.
Rather than see outsourcing as a threat, HR professionals should embrace it as a mechanism to enable faster and more sustainable growth, while elevating the function. The right outsourcing approach will give HR teams the ability to make their strategic work more valuable while not being labored with tasks that, while time-intensive, are still necessary. In turn, when executed correctly, the right balance of in-house and outsourced functions will prove to have a positive impact on workplace culture and team productivity.
HR Future Staff Writer.