Working as an HR Shared Services Manager for various organisations, I have always wondered whether outsourcing was the right path to take.
In the early days of my career as an HR shared services advisor, I could not grasp the positives of outsourcing or offshoring. But I must admit it opened a whole new world. A world of efficiency, service level agreements, and doing more with less. A world where you treated every request or query that came in as a request from a customer. And so, we started treating our colleagues as customers. It changes the way you start looking at HR as a function. There are two ways of managing shared services – outsourcing and offshoring. Here I want to focus on outsourcing to a third party.
Many businesses struggle with realising the benefits of outsourcing HR versus having a directly employed dedicated resource. Some companies can’t afford to have a dedicated HR resource on their books. How would they manage their legislative compliance?
I decided to take a dive into the topic and list out the pros of outsourcing some of your HR activities to a third-party consultancy.
- You have access to an entire team of resources, which in the long run, can be lighter on the headcount budget.
- A larger team can deliver non-value-add transactional work so core HR resources can concentrate on more value-add HR activities
- An outsourced team can remain impartial to any conflicts that arise
- It also means you can scale resources up or down depending on your company’s future strategy, which removes the requirement of legislative redundancy payments.
Each business is different and so are their HR requirements. There are a whole lot of companies out there who offer services like these, mine being one of them! Over time I have helped startups and small businesses look at their HR practices and offered them advice.
Outsourcing has helped them save at least 50% of the cost they would have had if they were to recruit a dedicated resource. It has also given small businesses the comfort knowing that they are legislatively compliant with their obligations as an employer.