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3 Reasons HR Outsourcing Makes Great Business Sense


Enable Group | Feb 15, 2017

Blog ● 2 min read

In today’s escalating competitive and demanding business environment, the pressures of running day-to-day operations often take priority. The ability to operate leaner, more cost efficient and continuously innovate can make the difference between staying in business and closing up shop – permanently.

That’s why more and more businesses are outsourcing part or all of their non core functions like Human Resource (HR) so that they can focus on core business. This is especially beneficial for SMEs which have far less resources compared to bigger firms.

In the last few years, the outsourced HR industry has, on an annual basis, grown to an estimated US$165 billion with nearly 85% of all firms outsource some or all of their HR functions. Outsourcing gives companies access to skills, knowledge and support, which help to lower costs in the long run. Still, there are many small and medium-sized companies who have not taken the plunge yet.

For them, here are 3 reasons that HR outsourcing makes great business sense:

1. Access to the latest tools and technology
Implementing new and up-to-date HR software can be an undertaking, and not forgetting the costs involved. HR solutions companies will be up on the very latest technology and will know how to exploit them to enable your company to stay at the forefront. Your employees will have access to the latest tools and technology which will provide them with greater efficiency and improved workflows in addition to greater employee satisfaction.

2. Control legal risk and improve compliance
The regulatory environment is getting increasingly complex nowadays and this can be difficult for employers to stay up-to-date on regulations that affect the workplace like worker’s compensation, safety violations, workplace discrimination etc. In a survey conducted by The Society for Human Resources Management (SHRM), 22% of the companies outsource to improve compliance, showing that companies recognise the growing challenges of complying with HR and employment laws. HR solutions companies help your company to minimise risks by utilising their expertise to focus on and protect you from non-compliance issues and decrease the risk of legal and regulatory liability. By contracting the expertise, companies not only save time and money, but are also able to focus on what they do best.

3. Attract and Retain Talent
Employee turnover is a natural part of running any business. When an employee leaves, a company must devote the time and resources to recruit and train new entrants. And this can be a drain on productivity and affect your bottom line. One of the most effective methods of reducing turnover is the use of HR outsourcing. The HR solutions companies can provide the expertise, time and resources to see to your employees’ needs. This will in turn lead to happier and engaged workforce while helping to reduce turnover.

To sum up, businesses want to maximise productivity, increase revenue and control costs. However, non core functions can bog down your time and slow the growth of your business. Delegating tasks such as outsourcing HR functions can get you ahead in the game. It allows you to focus on core business functions while providing you with high quality HR services and technology.

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