3 Reasons Why Outsourcing HR is Now the Preferred Solution

Posted by Creatiq Support | Wednesday, May 24, 2017

3 Reasons Why Outsourcing HR is Now the Preferred Solution

Posted by Creatiq Support | Wednesday, May 24, 2017

One of the leading business magazine recently stated
that approximately 85 percent of all companies outsource at least a few HR
functions. Keep reading to learn the motivation behind this growing trend and
how it will benefit your organization.

Affordable Advantages

The leading reason behind the switch from in-house HR managers to outsourced
HR professionals is cost savings. Outsourcing HR functions provides businesses with benefits that they normally couldn’t afford or
access. The more clients an HR service firm has, the more negotiating power
they may have to take on profit-driven health insurance and employee benefit
organizations. As a result, the business will be able to lower their health
care plan costs and offer workers many benefits that were previously
unaffordable. This makes the company more competitive when recruiting and
retaining talent in aggressive job markets.

Lower Legal Liability

Compliance is an ongoing challenge for many HR departments that must deal
with complex labor, safety, discrimination and employment regulations.
Increasingly strict regulatory environments make it quite difficult for HR
professionals in small businesses to remain perfectly compliant with changing OSHA,
worker’s compensation and Affordable Care Act rules. HR service firms often
accept some or all of the legal liability for maintaining compliance. HR
professionals in small companies often wear many hats and cannot keep up with
the demanding complexities of hiring, payroll and administration compliance
issues. Small business owners can selectively choose which functions to
outsource and which functions to keep in-house.

New HR Industry Standards

Business practices and perceptions are evolving with changing market,
industry and government trends. Companies can choose which functions to
outsource and the level of their integrated involvement with the HR services
firm. For example, the most popular solutions is the Professional Employer
Organization (PEO) model because the client retains operational control and
access to various HR and insurance products. This includes labor recruiting,
payroll processing, labor training and safety programs. An HR partnership
provides customized services and documentation with access to a team of
experts. Human Resources Outsourcing (HRO) is a comprehensive program that
comes with an on-site or assigned HR professional.

Keep in mind that once companies have over 50 employees, they may start
thinking about insourcing certain HR functions and permanently outsourcing
other HR functions like payroll and recruiting.