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5 Key Advantages of HR Outsourcing Services

In today’s world, HR outsourcing (HRO) is one of the most commonly known and widely used services by many companies. The best example is Unilever which has outsourced its HR department. LG group has also done similar outsourcing. There are numerous such examples all across the globe where we get to see small companies with 20 employees to large organizations with ten thousand employees outsourcing their HR departments.

Let us check 5 key advantages of outsourcing your HR Department.

  1. It is cost-effective for the organization:
    First and foremost, if cost management is critical for you then we must note that this can be very effective in saving the cost for the company. It is a great way for small businesses to afford Human Resource Software and expertise at a cost much lesser and more affordable than what they would have otherwise invested to get similar advantages. Companies can also choose limited services and have the advantage of having the best in the HR department for their employees. For such shared services, they may only need to pay for the services they want.HRO firms have the industry’s best-known consultants who have been heads of various HR departments. These firms also have retired HR directors of larger organizations who have done a lot of in-depth work throughout their careers. These experts have all the required vision to set up strong HR systems. They know the best way to manage employees and further build the organization with the help of these employees. An example can be seen at Salahkaar Consultants as well. Salahkaar Consultants is a global HRO company having associates in many countries. Shalav Chittranjan Daftuar, Director at Salahkaar Consultants has worked with companies like the world’s top cement MNC – ACC Holcim and also headed Hudson’s Indian operation. A few similar examples are L Anand who has been Heading an HR function at a large company. Other senior consultants and directors at the HRO service wing of Salahkaar have been HR directors at highly reputed organizations or retired senior professionals from the world’s leading organisations. So when a company is picking up such outsourcing services similar to Salahkaar Consultants, they get access to these knowledgeable senior executives. Salahkaar Consultants also have ex-directors who are working as part-time consultants or associates for Human Resource outsourcing assignments. When an organization cannot have these kinds of executives on their payroll because of their low salary budgets, they can get access to these Consultants. The services from these consultants will be cost-effective for the company since consultants cater to many companies together and therefore working part-time, they can give their expertise, knowledge, and vision to multiple clients and still not charge a bomb from them.You may call Salahkaar Consultants if you wish to discuss on these matters: Purchasing Power Increase: Say, your company is looking for a viable insurance option. It is interesting to note that these HRO companies negotiate with multiple insurance companies. If a company has 500 employees, they can go to an HRO firm where that firm would have hundreds of such clients who they provide shared HR services, therefore, they would have more than ten thousand employees pool to negotiate rates. This way, the targeted insurance company would give a better rate. Similar things happen while purchasing other HR services. A few days back Salahkaar Consultants’ director informed us that they wanted to hire employee engagement activity service providers. Salahkaar hired one vendor for 22 companies together, therefore they could reduce the overall cost. The reduced rates were 35% of the original cost. So, when you work with these HR firms, you bring various HR facilities at a better rate. I can bet, you will not get such rates and a variety of different services. Hence these HR firms can be very cost-effective for your organization.


  1. Increases the efficiency of the company
    As we know organization’s efficiency is the key to building strong teams. If your systems are not strong, your attrition will be higher. Therefore, companies also consider outsourcing HR services as it leads to greater efficiency within the Human Resources department. Other details are already mentioned above. Simply speaking, this is because of a better pool of HR consultants, their set processes, etc.You can even consider outsourcing a few sub-division of HR functions as well viz., payroll, employee benefits administration, etc. You may know, that this comes under shared services because one team at an HR company deals with multiple clients for one kind of service.To have a free discussion on these matters and what will suit you better, you can write to us here in Processes: For example, a company hires an HR head for an organization and after working for three years, the HR head leaves the organization. There will be a new HR head who may have a different vision and thought process. He may also stay for 3 years and again leave. This cycle of hiring and leaving will create instability in the HR department in turn making your employees feel confused and your organization will look weak in systems and processes. This is even true for larger organizations. But, if you outsource your HR, then one system and process that has been laid down by a particular HRO firm will be more stable and they will give benefits of a stronger system and process which will make the organization more efficient.


  1. Provide expert guidance
    The companies that provide HR outsourcing services are experts in their field and have years of experience. Many such HR companies work in multiple industries which makes them gain extensive knowledge in the field of HR from multiple industries. Thus, they can provide expert guidance and use the knowledge gained in one industry for the benefit of another industry. Example – Skill Matrix is more used in auto sectors. Salahkar Consultants uses Skill Matrix in the IT service industry. Thus, knowledge of one industry is used in another industry. These HR firms have consultants and ex-HR functional heads. They have consultants who are Ph.D. and have written many books, research papers, and similar and at the same time worked for numerous years as senior HR executives. They regularly visit HR conferences, have membership of HR forums, etc. These meetings obviously help them in knowledge sharing, strategies building ideas, etc. This way you can get expert guidance by just Outsourcing to these HR firms.
  1. Provides Flexibility
    One of the key reasons why Human Resource services are outsourced is to ensure that the HR department functions smoothly. Sometimes there are sudden increased requirements for the HR department. You can always fulfill such requirements spike by outsourcing.Then, while serving, many quality HR candidates are available in the database of these HR companies. They can be hired quickly as per your requirements. The quality of these candidates are better as they are filtered at many levels. Even candidates’ salaries are lesser than what typically an organization needs to pay because the candidate can negotiate a higher salary than their caliber if they are not judged properly. In such cases, if you go through an HR company, the HR candidate’s salary would be paid as per their caliber. Also, the candidate would have strong KPIs and the HR firms would know how to handle these HR executives. This way the whole working will be smooth. Few HR companies like Salahkaar Consultants have their own HR software for employee management and HR automation. These are more practical and easier to use since they develop their software as they experience challenges in the market. These software will automate a lot of things, like sending a birthday greeting, automation of job description items, etc. If you go to develop such software, you may need an HR expert to guide you on practical aspects, and you will have to invest a lot of money. As mentioned, Salahkaar Consultants has built software which is beyond the usual HR software that are there in the market. You can use this type of software by paying a nominal fee to companies like Salahkaar Consultants. You will have the option to pick up any tailored or a big brand software. All these flexibilities help companies of all sizes to scale their business quicker than would have been possible otherwise.
  1. Easy risk Management
    As the world is changing so are the laws. Due to these rapid changes, it becomes difficult for the business to remain up to date with the latest rules and regulations. HR outsourcing firms have HR compliance managers and lawyers who keep themselves updated on the latest laws, rules, and their implications on businesses. Salahkaar Consultants has a proper HR compliance reporting structure that can help organizations to remain compliant and save the organization from unwanted issues.

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