Introduction

What is meant by Outsourcing HR department?

This means to obtain HR services from qualified contractor who can get the job done while saving the
company man power, money and time. It enables the company to focus on strategic activities to achieve
the company bottom-line instead of becoming tangled with HR issues including payroll management,
taxes, benefit administration, legal services, Staffing, Staff training and development, employee health
management.

Advantage of Outsourcing human resource department

Risk Management

HR outsourcing firm help business minimize risk associated with employment, labor laws and change in
regulations since it is difficult for employer to remain updated with regulations that affect work place.

On the other hand, HR contractors can handle legal issues and other complexities e.g. HR policies,
procedures and practices, Compliance laws, labor laws, legal talks etc. since they employ HR
professionals whose purpose is to stay abreast with laws and regulations. HR firms also maintain and
audit company on policies, procedures and practices to ensure companies and employees best interest
are remain protected.

Cost Saving

HR Contractors reduce cost of maintaining non-revenue generating back office expenses. A full HR
department require additional office space, high trained and experienced staff. For example, the
company may find it cost efficient to outsource HR functions rather than expanding the office space to
accommodate HR department and associated costs.

Efficiency

HR contactors tend to use advanced HR technology which help streamline important HR functions such
as payroll management, benefit administration and compliance management. This will save time and
paperwork’s to management hence improve efficiency and effectiveness and allow focus on key
strategic issues for business prosperity.

Staff Development

Outsourcing HR function help business manage employee performance and development. HR

contractors implement performance management plans to ensure employees comply with company’s
policies and procedures effectively to business objectives. The HR contractors will use different
techniques including performance appraisal to assess and monitor employee performance and report to
management for actions.
Conclusion

It is of the best interest for the company not to outsource the whole of HR function. However, the
company can outsource functions that are regular and take most of time especially those deal with
numbers, data, reporting etc. but employment development should stay within the company on
personal level since line manager are in better positions to understand the need of his/her staff within
the department.

Apart from that, contractors do not have close relationship with employees or employers since they are
not physically present. It is important to have actual person in HR department who can bridge the gap
between employees and employers. Employees need some one they can talk to or go to when there are
payroll faults, fight among employees, crisis in employ’s life that may affect job attendance and overall
performance. Therefore, having a well-informed and immediate HR Presence is very important in an
organization.