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Outsourcing HR Functions Trends in Small Businesses

By ESOutlook | Monday, December 17, 2018

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Human Resource (HR) sector is among the most crucial sectors in an organization; also it has witnessed immense growth over the past few years. Recruitment and resource management are few of the many tasks but this sector is observing the trend of outsourcing. Small businesses have started to outsource their HR department for the crucial process of recruitment. Organizations find this cost-effective and allow them to focus on their core business. A study by Deloitte estimates that the HR sector is among those that have seen the most growth in being outsourced along with healthcare, IT and finance.

This shift of outsourcing HR brings benefits with itself for small businesses which enable them to function in a much-organized manner and also maintain standards. Some reasons that have brought the trend into existence and are widely being accepted are listed below.

•​  Focus over Business Productivity: Instead of focusing on tedious administrative tasks and recruitment process businesses now are able to pay attention to more strategic process without any hindrance.

•​  An Enterprise-Class Solution: Outsourcing the HR sector benefits organizations to cut down the investments and possibility is there to enjoy enterprise level of workflow. The saved time, cost and efforts permit small organizations to compete more efficiently in the market.

•​ Better Software Solutions: Software as a service is a key player in providing HR and related service. Outsourcing results in getting hands-on better technologies with minimal investment. Also timely upgrades, backup and developing new services based on requirements are pros of the trend. The traditional HR services such as recruitment, training and applicant tracking are also now covered under this.

•​  Compliance with Regulations: At times it is difficult for organizations to comply with regulations and laws, especially with the one that is set for employees. Outsourcing turns out as a great solution to such issues as the HR firm personnel are trained in handling these issue which makes the compliance easy for small businesses.  

•​  Other Benefits: As businesses want to focus on the core they find it better for HT firms to manage every other aspect for them. This includes leadership training, payroll, tax deduction, leave allotment and tracking, employee satisfaction and needs.

With all its benefits HR outsourcing seems to be great but it does not fit all business models. Organizations need to analyze their requirements and then decide whether outsourcing is going to benefit or an in-house approach would be better.

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