Accessing the need for HR outsourcing
by Debbie Gibson
HR outsourcing is expanding at a rapid rate and includes a number of factors:
- Recruiting
- Payroll
- Compliance
- Benefits administration
Running global operations comes with numerous challenges, including staying on top of multilingual staff, labour laws across different cultures and a multitude of tax regulations, all of which are becoming increasingly time-consuming. Outsourcing these operations to experienced professional service providers can alleviate this and shift the focus, helping businesses grow in the longer term.
Overcoming challenges starts with the right partner
By 2027, the HR outsourcing market is expected to grow by $13.6 billion, but despite having numerous benefits, navigating how to outsource correctly is not without its challenges. Partnering with an unsuitable provider can lead to data mismanagement, issues of non-compliance, and subpar services.
However, these hurdles can be overcome once organisations partner with an experienced provider.
Outsourcing HR can provide organisations with access to professional expertise, compliance with employment laws, efficient recruitment processes, and cost savings. By opting for HR outsourcing, companies can streamline their operations, enhance employee satisfaction, and dedicate more time and resources to their core business activities.
Saving time and money
By using HR outsourcing, lengthy processes like hiring and recruitment, employment law and complex tax systems are delegated to third-parties, freeing up time to focus on other business-critical issues.
Another big benefit of outsourcing is cost savings, especially as businesses continue to expand internationally. As a company scales, these external professionals can carry out all the necessary HR functions to ensure the smooth running of the organisation, which ultimately results in higher costs. However, by outsourcing services, companies are able to save money in the long run.
Examples of cost savings include spending less on salaries, training and development and insurance expenses that are associated with an in-house team. This can then save on recruitment and hiring, payroll, and compliance costs.
How to minimise and manage risks
With employment and labour laws continuously changing, keeping up to date with the latest regulations can not only impact the workplace but is also necessary to minimise risks and remain compliant.
Through outsourcing HR, teams have access to professionals who have a deep understanding of laws and regulations, which also helps with maintaining and auditing company policies to remain one step ahead.
Flexibility to scale
Another benefit of outsourcing is flexibility, which allows businesses to change size, which is key to business growth and scalability.
If a business is going through a period of growth internationally, it must align its existing HR principles and policy with local employment laws and country-specific requirements. This can be daunting, and something in-house teams may not have the necessary experience to handle.
Employment law varies from country to country, and for every country HR teams need to be up to speed with that country’s legislation. Some countries, such as those in the EU, will operate within a similar framework – however, each location will have its own nuances, from data privacy regulations to tax legislation.
For expansions to be successful, global compliance is essential, which is why handing these complexities over to a third party expert is one of the most important benefits of outsourcing.
The changing future of HR outsourcing
Outsourcing all or some of your activity can be game-changing. Enlisting the help of a dedicated specialist like activpayroll can ensure that businesses stay on top of ongoing changes and continue to comply with the ever-changing employment laws and regulations in each location without investing too much of their own time.
In the United States, 32% of organisations delegate at least one HR activity to external providers, with 51% choosing to outsource as it benefits administration.
How we manage remote workforces has changed, as performance management and compliance issues differ between locations. All employees need to have the same professional development opportunities, whether they work in the office or remotely. When it comes to outsourcing HR services, organisations can justify hiring more people for their HR team to address all the different needs for global workforces, but this isn’t necessary if they partner with the right HR consultant.
Compliance regulations continue to evolve, remote working is more common, and the challenges around recruitment have also changed. Expert outsourced HR support can help meet all the needs of a business, and in today’s complex workplace, outsourcing works in tandem with a HR team, not by replacing it.
Get in touch
At activpayroll, we give our customers the confidence to manage their global workforce smoothly. Our international network of specialists, together with your existing team and processes, makes your HR and people compliance efficient and effortless.
As your partner we will work with you to ensure your global payroll, international payments, and HR operations are a source of strength for your business and its growth.
Debbie Gibson, Head of Sales and Partnerships, also shared her thoughts with HR Director. You can read the full article here.