Business Process Outsourcing
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OUTSOURCING RESOURCES No ratings yet.

OUTSOURCING RESOURCES

 BENEFITS of OUTSOURCING RESOURCES

Some people will claim, with a lot of certainty behind them, that Outsourcing of resources and precisely Outsourcing of Human Resources is actually one big saving for small business. How is that possible, you may ask yourself. That and many more we will discuss further in this article. 

With its rapid progress all the way since 1970s and even bigger progress in 1990s, ‘insourcing of Human Resources’ grew popular for many large companies that were out there. Why? Because they realized the cost savings benefits of a reduced staff, more efficient payroll processing and legal compliance, and streamlined recruitment. 

At their very beginning, external HR companies had a lot of difficulties, but it is estimated that in the last several years, outsourced HR industry has reached to approximately 165 billion USD per year.

Smaller businesses have started to get in on the trend, with startups like Beyond Meat, who contract Private Employer Organizations (PEOs) to create their own fully functioning Human Resources department externally. The motivation is two-fold. Why?

Because PEOs share the liability of legal compliance, and offer a range of employee benefits small employers could never otherwise afford.

Paul Belliveau, a veteran of Human Resource management with more than thirty years of experience, agrees there is tremendous benefit to outsourcing the administrative side of HR, but he also states that there is a big need for cautions, because the human side should not be overlooked. "Organizations need to make sure they are not giving away the candy store. As a business, you need to identify the things that HR does to increase the value of the humans within the company and keep that in house. If you have employees with promise you have to develop them." That not only helps maintain a workplace where employees feel valued, it's strategic, and actually builds the company’s financial value.

 

What are five reasons for Human Resource outsourcing:

  • IT WILL SAVE YOUR MONEY

If you run an effective HR department, it will also cost you a lot of money. That is why many organizations out there just decide that it is not worth it all of the trouble and instead hire world-class specialists, they could never afford to bring on-board permanently. 

  • IT WILL ALSO IMPROVE COMPLIANCE

We live in a world where there are a lot of regulations, there is a constant threat of many issues like lawsuits, wrongful termination, safety violations and if you hire a compliance specialist, you do not have to worry about that, because you will have a professional to do the job for you and instead of you.

  • IT WILL PROVIDE AN ACCESS TO THE TOP QUALITY VALUABLE TOOLS AND TECHNOLOGY

The most innovative HR-services supplier will be up on the very latest technology, including big-data mining, analytics, virtual workforce leadership, cloud technology and social media, and will know how to exploit them to meet an organization’s specific needs.  

However, Peter Cappelli, Professor of University of Pennsylvania’s Wharton Business School, disagrees with sayings that he is against the idea of hiring a lot of experts ways there are.. "I'm usually not a fan of these things, but this is one of those rare instances that is both cheaper and better," he says. "It's a big burden on a local HR manager to know everything."

Though centralized services frequently mean scripted responses, Cappelli maintains those responses are more accurate and lead to better overall service -- especially in America, where professional services like payroll, benefits and compliance -- once the domain of in-house staff -- are becoming massive industries in and of themselves.

The key, Belliveau argues is to make sure you continue to nurture the human side of the equation, a strategy that is integral to a company's success. "When you are determining whether or not to outsource," he says, "I wouldn't focus on cost. It's the increase in value that matters." (external resource- http://www.inc.com/fiscal-times/human-resources-big-savings-for-small-business.html)

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Mondy Holten, SAP BI Consultant

mondy.holten@xadat.nl

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