July 16, 2024
Marketeer
July 16, 2024
Consultday has many years of experience at the intersection of HR and IT. The outsourcing of HR administration and/or payroll is a challenge that many organizations are exploring. Often, the information available focuses on the benefits of outsourcing. Therefore, we will outline both 5 benefits of outsourcing and 4 benefits of insourcing in two articles. In this first part, we start with the benefits of outsourcing HR Operations.
A BPO partner (Business Process Outsourcing partner) is not just a vendor but a strategic partner that adds value to your organization’s HR and payroll administration. The specialists of a BPO partner often have in-depth knowledge of the associated software packages and stay updated with the latest developments continuously. This means that the organization can benefit from advanced technologies and best practices without the need to make significant investments in training and technology upgrades. A BPO partner can also offer economies of scale that individual companies may find hard to achieve, enabling cost savings without compromising on quality and reliability.
HR administration, particularly payroll administration, has become much more complex in recent years. This complexity impacts the required competencies within administrative teams. Nowadays, fewer employees are needed, but the required skill level has significantly increased. This often results in a mismatch between the current staff and the required type of employees. It also becomes difficult to retain and attract the right people, leading to higher turnover, increased hiring costs, and greater continuity risks. By choosing outsourcing these risks are all transferred to the BPO partner, which ensures continuity for your own organization.
A significant advantage of outsourcing is that it operates based on a predefined business case. Firstly, a business case helps to make an accurate estimate of the costs that the organization can expect for HR Operations. It also assists in determining the right KPIs. Based on these KPIs, it should be clear what is expected from both the BPO partner and the internal organization. In practice, this is often not sufficiently ensured. Lastly, the established business case helps to monitor and achieve the defined savings effectively.
Laws and regulations in the field of HR and payroll are complex, and failing to comply correctly can result in significant fines. By choosing a BPO solution, organizations mitigate these risks. Additionally, you ensure that you have expertise available that HR and other internal employees can consult. The BPO partner is responsible for possessing the correct knowledge and keeping it up-to-date. This responsibility no longer lies with your own organization.
The choice for outsourcing is connected to the discussion around the role of HR. HR is often blamed for the poor or mediocre functioning of HR Operations. This negatively impacts the business’s perception of HR, making it difficult for HR to fulfill its role as a strategic business partner. Choosing outsourcing allows HR to focus better on the business and thus assume the desired strategic role.
A BPO partner is a specialist in HR and/or payroll administration. They work with experts who are well-versed in the associated software package. A good BPO partner will continually strive to keep up with the development of the package and the service. As an organization you can leverage this expertise without having to fully invest in it yourself.
Outsourcing HR Operations offers organizations many benefits, from improved continuity to reducing compliance risks and freeing up HR to focus on strategic tasks. By partnering with a specialized BPO provider, companies can benefit from the latest expertise and technology without the associated investments. But why would you still choose to insource HR Operations? We’ll tell you more about that in our next blog. Read the second blog through this link and discover the advantages of insourcing.
