The human resources department is faced with many tasks. HR outsourcing is designed to relieve this burden. People are a company's greatest asset, but also its most costly. The costs associated with hiring, training, and managing staff can quickly become a company's largest expense. There's no denying that hiring, training, and managing employees is a significant challenge for every company. However, that doesn't mean you have to do everything yourself.
HR outsourcing is the process of outsourcing certain HR tasks to third parties instead of completing them internally. This includes, for example, the outsourcing of individual areas of the HR department - i.e. targeted HR department outsourcing - such as hiring new employees, drawing up employment contracts, administrative support or payroll accounting. According to our study “Opportunities and risks in outsourcing human resources processes” 66% of the companies surveyed stated that they already had knowledge of HR BPO.
The main reason for HR Outsourcing is traditionally based on cost considerations. Human resources is a significant cost for most companies. This is where hiring an external human resources manager comes into play. By outsourcing your HR department, you don't have to hire a full-time HR manager to handle hiring and employee relationships. You cover the costs as needed, which is less fixed than with a permanent position. Furthermore, there are no costs for social benefits (including health insurance), sick leave, vacation, and other perks, as these are service costs rather than personnel costs. Instead, you pay a transparent fee for one of you selected package of HR outsourcing services. The enormous advantage of this is that you If necessary, additional services (e.g. Recruiting, HRaaS, HRBP on Demand, HR Audit) add or unsubscribe. These packages can therefore be tailored to you. In addition to what has just been mentioned, HR outsourcing offers other advantages.
Higher productivity through clear HR structures:
When you outsource your HR department, you can expect an immediate impact on productivity, especially in small and medium-sized businesses where HR is often neglected or handled by one or two people. Most outsourced HR tasks bring a company-wide approach to employee management, which translates into increased productivity. This is due to the fact that many HR outsourcing experts are familiar with process-oriented management, which involves implementing and following detailed workflows and procedures. Furthermore, the external person can focus 100% on HR tasks, rather than handling other functions.
Access to concentrated HR expertise:
Building and managing an effective human resources department requires extensive expertise and years of experience. HR Outsourcing offers the advantage of relying on external experts and specialists who specialize in human resources management. This HR Outsourcing partners often have a wide range of experience from different industries and companies. Not only do they bring in-depth knowledge of current HR trends and best practices, but they also offer a valuable outside perspective. This external perspective can help uncover blind spots in internal processes and find innovative solutions to people-related challenges.
Access to current HR trends and best practices:
Running a successful business is a science in itself. That's why there is a lot of research and data that shows what companies need and what they don't. However, it is not possible for every business owner to keep up with all of this information. Through HR outsourcing you have Access to HR experts who keep an eye on current trends and developments, deal with HR topics and share their knowledge with you.
Transparent and predictable HR costs:
As we mentioned earlier, the labor costs of hiring full-time staff are high. Therefore, from a financial perspective, it is advantageous to outsource the HR functions. By outsourcing their HR functions, companies can reduce or eliminate the labor and cost burden of recruiting, hiring and retaining their human resources department. There is a fixed service fee as a service cost, which is more transparent and predictable than personnel costs.
Flexible expansion of your HR portfolio:
Finally, one of the advantages of HR outsourcing is that companies can expand their range of services. You are not dependent on the capacity or expertise of a specific HR person, but can rely on the provider's entire portfolio. For example, setting up a compensation system parallel to outsourcing payroll or developing a 360° feedback process including the involvement of the works council parallel to HR administration.
When searching for a suitable HR outsourcing partner, companies should carefully consider their requirements for the collaboration – and which provider can meet them. A crucial factor is the service provider's experience: How long has it been operating in the market, which industries do they specialize in, and which clients do they currently serve? A good partner brings not only comprehensive expertise in operational HR management but also strategic competence to efficiently design HR processes and actively contribute to company development.
In addition, transparency is a central criterion. Services, responsibilities and price structures should be clearly defined and documented in a comprehensible manner. This is the only way to establish a trusting, long-term collaboration on an equal footing.
Technical know-how also plays a role: using various digital HR tools, such as time recording, payroll or employee communication, should be a matter of course for the HR service provider's team. Your HR department does not yet use its own HR tools? Then make sure that the HR outsourcing provider doesn't make you dependent on them when integrating you into their system. Instead, remain the owner of your data, for example, through a flexible cloud solution.
Last but not least, the personal component should also be right. A good HR outsourcing partner understands the customer's corporate culture, is flexible in collaboration and acts proactively instead of just reactively. Getting to know each other first, ideally combined with concrete examples and references, helps to get a feel for the service provider's working methods and values.
Now that you know what HR outsourcing is and what benefits it brings to your company, you may ask: How do I actually implement this? Here are three practical ways HR outsourcing partners can support you:
1. Leave it to the HR outsourcing partner the recruiting process
Searching for new employees can be time-consuming and nerve-wracking. Experienced recruiters: take care of this for me - from the job advertisement to the pre-selection to the coordination of interviews. This way you can find the right people faster without having to struggle through countless applications.
2. Put operational HR issues in trustworthy hands
Whether personnel administration, employee feedback or support with personal concerns - HR generalist: take care of the operational issues relating to employees. Professional, neutral and with the necessary sensitivity. This keeps the working atmosphere stable and you can concentrate on your core business.
3. Let someone else do your payroll
Payroll, social security contributions, legal deadlines – payroll outsourcing partners keep track of things and ensure that your employees are paid correctly and on time. At the same time, you save time and avoid mistakes that can be very expensive.
It is undeniable that hiring, training and managing employees is a major challenge for any company. However, that doesn't mean you have to do everything yourself. Outsourcing your HR offers many options to make everyday company life easier, regardless of whether you want to outsource entire HR work or just partial processes. If you would like to find out more, please visit our page HR Outsourcing Services. Find out which processes you can outsource today.
