Outsourcing human resources is not something new, though it has become grown into a major component of many HR department. The focus on outsources is a result of organizations trying to focus manpower and financial resources. With global talent able to fulfill many of the requirements of an HR department, employee costs and management are reduced often with an increase in performance.
The Small Business Association estimates that it costs $1,469.00 per year per employee to handle human resources in-house. For a lot of small and medium sized businesses, that’s too many resources taken away from marketing, new product development or the onboarding of additional staff. In addition, this increases the focus on your company’s core competencies, avoids administrative busywork and can increase the level of benefits you offer to make your packages more competitive with those of larger companies.
How to choose the right HR outsourcing partner?
Keep in mind as you evaluate HRO (human resource outsourcing) partners that this will more than likely be a long-term relationship, and like other relationships it will evolve over time. It is very important that you learn as much as you can about a prospective HRO partner before you sign a contract.
Here are some areas to consider when evaluating a potential HRO partner:
- Need for Expertise
- Reliability Matters
Even with cost as a significant priority, be wary of focusing so much on cost that you end up ignoring quality and experience and going to the lowest bidder. The old adage “you get what you pay for” applies to HR outsourcing as much as anything.
In the end, it basically comes down to trust. It can be a difficult factor to quantify, but many times you can get the sense early on in the negotiating process if an HRO partner will be trustworthy and that you can work with to build a strong relationship.
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