Prior to the conception of the HR departments in organizations, most of the HR functions were taken care by accounts and finance wing of organizations globally. Then the need of HR as separate wing was felt and organizations begin establishing HR departments with responsibilities beyond functions like payroll which was accounts responsibilities previously. Today perhaps we are at cross road where we have HR departments which are engaged in strategic but also many non-strategic roles like managing training workshops, resume for recruitment, interviews and similar others. But with major shift in competition in business you need to focus on strategic HR roles which will help the department to work as partner to business and can affect it bottom and top line positively. To achieve it becomes imperative to outsource your non-core activities to specialist who are veterans in the business and are doing it for numerous other companies way of adopting best practices and hence HR Outsourcing. By outsourcing your non-core functions you would also minimize your dependence on a few selected employees, the loss of who might weaken the organisational process.
Cost reduction: Key factor in many outsourcing decisions, but should not to be considered in isolation from other costs/ benefits;
Increasing effectiveness of HR delivery: Experienced outsourcing providers can often deal with HR processes more effectively. For example, recruitment may be undertaken more quickly, reducing employee turnover costs and speeding up the pace of growth;
Providing greater expertise: External providers may offer greater levels of specialist knowledge or experience than affordably available in-house;
Moving HR up the value chain: Outsourcing human resource administration can lead to a shift in HR focus towards policy and decision making;
To aid organizational growth: Fast-growing organizations can lack the HR capacity to deliver business objectives, making HR outsourcing an attractive solution..
We at Salahkaar Consultants bring the above mentioned advantage because of our huge experience in HR domain since 1983 and because our divisions are headed by industry’s Thought Leaders.Under HR Outsourcing, We specialize in Recruitment, Training and Payroll functions.
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A blog on HR Outsourcing
By – Divya Jiwtani for Salahkaar Consultants
Human Resource Outsourcing refers to the process of utilizing the services of the third party to take care of its HR functions. This third party is responsible for Human Resources for the Company.
Outsourcing is the hiring of a third party outside the company to perform planned or existing activity that is or could be done internally. In outsourcing services or job functions are farmed out to a third party.
Human resource outsourcing definition
Human Resource Outsourcing also known as HR Outsourcing or HRO is a process of hiring of companies to handle some or all of a business’s HR tasks and functions. Since HR functions can be complicated and laborious, many business organizations opt for outsourcing either whole HR logistics or part of the HR responsibilities like payroll.
It is a contractual agreement between an employer of an organization and an external third-party service provider where, the employer transfers the management of, and responsibility for, certain HR functions to the external HR service provider.
Some business organizations may outsource their entire HR department while others might just outsource time-taking functions like administrative tasks, which therefore allow their internal resource to focus on the strategic level.
HR Outsourcing Services
These are a few services provided by Human Resource Outsourcing service providers:
- Recruiting, selection, training, and development
- Overseeing organizational structure and staffing requirements
- Tracking department objectives, goals and strategies
- Employee orientation programs
- Administration of Payroll
- Benefits Administration
- Insurance Services
- Performance Management
- Policy Compliance Management
- Labor Law Compliance
- Talent Management
- Audit and Wage-Claim Assistance
HR Outsourcing – Need
Factors those mainly are responsible for an organization’s decision to outsource its HR functions.
Some of the factors responsible for creating need of HR outsourcing are:
- Enabling business organizations to concentrate on core operations.
- Delivering cost savings – both direct as well as indirect cost savings.
- It helps in creating a stable and economical operating platform.
- Outsourcing can improve employee relations and ensures efficient Hiring Orientation.
- Outsourcing services can come up with better HR Training and Professional Development.
- Conveying risk and accountability for people issues to the service providers.
HR Outsourcing – 3 Types
HR Outsourcing is broadly separated into three types, these are:
1. Application Service Provider (ASP):
An Application Service Provider is a specialized third-party group responsible for providing commercial hardware and software applications to support large organizations, which consists of application vendors like Microsoft, Oracle etc. These vendors have evolved application packages in order to support human resource activities in an organization.
An organization uses ASP Services to outsource either a portion or the whole of their information technology requirements. The major drawback of ASPs is that costs associated with application software are high.
2. Business Process Outsourcing (BPO):
Business Process Outsourcing or BPO refers to the method of employing a third-party service provider to carry out one more business functions in a firm. The main difference between ASP & BPO is that in BPO, the client is in direct contact with the employees via call centers.
BPOs are usually the first choice of Multinational Corporations (MNCs) as they operate in more than one country and employ a large number of people.
3. Total HR Outsourcing:
Total HR Outsourcing is a type of outsourcing, where the entire HR function is handled by the third-party service provider. There isn’t any particular HR department or team in the organization. All the functions of HR like sourcing, training, etc. are done by the third-party service providers depending upon the requirements on client organization.
HR Outsourcing – Advantages:
Top 20 Advantages of HR Outsourcing are:
1. The major advantage of HR outsourcing is that it allows the employees to focus on the long term goals that truly matters for the organization.
2. It provides flexible solutions and costs.
3. Eradicates the pressure to recruit, manage and motivate a diverse in- house HR team.
4. It improves employee relations and streamlines hiring orientation.
5. Removes non-operational distractions from the line.
6. It helps in saving time and also minimizes paperwork.
7. Provides reliable, professional compliance in various areas like employment, labor and immigration law, and payroll.
8. Reduces the fixed cost of managing employees.
9. Better risk management.
10. Cost-Effective services.
11. It enables you access to a pool of talent that has knowledge about the latest changes happening in the market.
12. Better management of employee performance and organizational development.
13. Increases the value of products and services, customer satisfaction and share-holders.
14. Ensures the smooth functioning of HR department.
15. Flexibility is another major advantage of Human Resource Outsourcing.
16. Maximizes organizational resources.
17. Helps in gaining market access and business opportunities through the service provider’s network.
18. Brings in a talented and skillful workforce to the organization.
19. Makes better technology and software system available for the organization.
20. It helps in acquiring innovative ideas.
Global PEO Services
By – Divya Jiwtani
Global Professional Employer Organizations, or Global PEOs, are the organizations that enable other companies to hire supported employees anywhere around the globe quickly, compliantly, and without the burden of establishing a foreign legal entity.
What is a PEO?
A professional employer organization (PEO) is a third party outsourcing firm or agency that provides services to small and medium-sized businesses. PEOs generally manage payroll, benefits, and other HR responsibilities for the employees of a client company. PEO is additionally called the Co-employer.
A PEO is a HR outsourcing service provider, which can assist a corporate or firm with the management of employment related tasks, including employee benefits, compliance with state and federal regulations, servicing payroll and risk management. It’s essentially a ‘co-employment’ relationship between the PEO and the client-company, where the employees or staffs are employed by both, so that the PEO can assume some of the employer responsibilities for the client.
What is an International or Global PEO?
A global PEO on the other hand manages all the functions of a PEO—payroll, benefits, legal compliance—but for workers situated outside of a company’s home country. A global PEO is a vital partner for businesses expanding overseas, especially those looking to recruit employees in a variety of different countries. A global PEO can assist firms to navigate legal and cultural differences and successfully expand into new markets.
A global PEO typically manages the following functions for any given company:
- Payroll Services – Almost like regular PEOs, global PEOs are liable for making timely payments to international employees, taking under consideration geographical zone differences, currency exchanges, and international banking practices. Global PEOs interpret and suits local tax laws, making the mandatory tax withholdings.
- Benefits – Countries round the globe have contrasting approaches to employment benefits. An international or global PEO helps firms understand cultural expectations for employment in their target market and provide a benefits package that meets local legal requirements.
- HR/Legal Services – Full compliance with local employment and payroll regulations could be achallenging, yet essential, a part of a company’s process of international expansion. Global PEOs help companies operate efficiently and fully legal compliance as they operate in foreign countries.
- Additional Benefits – Companies having international employees are cognizant that there are many unexpected challenges with international expansion. A world PEO could be a partner who already includes a presence round the globe and might help in identifying and resolving the challenges that arise from legal and cultural differences.
Why use a Global or Worldwide PEO?
The primary reason to use a global PEO is that the PEO has a built in HR support structure that includes:
- Risk Management and Worksite Safety
- Payroll Servicing
- Insurance and Workers Compensation Coverage
- Regulatory Compliance
- Withholding and Taxation
How Does a Global PEO Arrangement Work?
The international or global PEO contracts in a very business-to-business (b2b) arrangement with the client company to handle defined aspects of the duties to the staff. This may be a comprehensive service, or in some cases is also scaled all the way down to suit the client’s specific needs.
The client-company still has the employment contract with the employee or the worker, and can both negotiate compensation and manage the work activity. The employee will probably not even notice the PEOs role, except if they have concerns about any administrative issues that come up.
8 Key Benefits of a Global PEO
The 4 Benefits of Global Professional Employer Organizations or Global PEOs are listed below:
1. Flexibility – PEOs allow clients to hire full-time employees (instead of contractors) risk free without having to line up a legal entity within the country they’re trying to expand to. PEOs allow firms and corporations to recruit employees which will get the work done, creating a stronger employment relationship and more stability than a flood of temporary workers could provide.
2. Local Compliance – One of the biggest difficulties for employers is to grasp the local payroll regulations, mandatory and non-mandatory benefits and native labor laws. Using an international or global PEO allows employers to sidestep these tricky issues, placing the compliance requirements and international payroll solutions within the capable hands of the third party local partner.
3. Cost Efficient – A Global PEO Service provides a value efficient and non-cumbersome way of setting up a local entity i.e. a registered company or firm in a foreign country. International PEOs allow employers to recruit local workers or employees without going through the expense and hassle of setting up a local, permanent establishment. This method is extremely beneficial for small startup companies which are aiming to expand their businesses in other nations.
4. Accurate Financial Forecasting – Due to various factors financial forecasting becomes a fancy process, especially when international business is involved. A global PEO has extensive experience with the above factors, allowing it to assist its partner companies and firms develop accurate projected budgets.
5. Data Security – A global PEO with a GDPR-compliant platform has navigated the complexities and requirements of the regulations passed by the countries. Global PEOs ensure to provide its partners with the security of knowing that its employee data is held to the very best standard of information security.
6. Streamlined Expansion to New Markets – New markets abroad present various new opportunities for growth. If a global PEO is managing and administering payroll and benefits of your company, it can make sure that it’s compensating its international employees in accordance with local law. Which means the workers of your company are satisfied and productive, and you’ll have the muse for a decent reputation with the local government of the country and within the community.
7. Time – The number one reason employers hire or recruit international talent is to form a global footprint near their target market. And in instances where companies are seeking, time is of the essence.
An international or global PEO gives employers an opportunity to skip the competition and saving a lot of their time by putting them in a place where it requires only a fraction of the time to hire employees through more traditional means.
8. Expanded Benefits Offerings – A global PEO can certainly help small businesses as it offer the benefits that potential employees expect, improving recruitment and employee retention. This could be crucial for a business expanding overseas, as workers in an exceedingly new market may expect a baseline benefit that the corporate or firm doesn’t provide in its home market. A global PEO can help provide that benefits expected by the employees in a cost-effective manner.
Workload, loss of job security, and personnel problems upset employees and dragged their satisfaction levels down. In fact, the negative consequences of stress are so strong that it has been declared a World Wide Pandemic by the World Health Organization. Although many have tried to construct an all-encompassing list of stress reduction strategies, recent studies have shown that there is no one-size-fits-all approach.
1. Encourage workplace wellness
Exercise and staying healthy are two of your best weapons against the stresses of your workplace. Exercise lifts the minds of employees away from the stresses of their work so that they can concentrate on work. It also improves mood by increasing the production of endorphins, the feel-good neurotransmitters of the brain. Encourage employees to take a walk during lunch break
Subscribe to gym membership
Bring a yoga instructor to the office once a month
Organize a stage competition between teams for fitness trackers
Serve healthy snacks in the office. Employees think when they think you are looking for their health! A study by Peepod.com reported that 66% of employees felt extremely happy or very happy when their employer regularly stocked refrigerators and cupboards, and 83% said that healthy and fresh snack options were a very big crisis. Something as simple as keeping fresh fruit or cartons of yogurt in the fridge goes a long way with the staff.
2. Create quiet time
Stress cannot be completely avoided, but you can help reduce it when it arrives. Make sure your employees have a place where they can take a break. Our research shows that more than 80 percent of disgruntled and hostile employees relished the opportunity for a nap, massage, or stress-relieving break as a necessary break. A small room, a lounge space at the end of the hall, and even an outdoor bench can be the perfect places to take refuge from the chaos of the daily grind. Think of long-retreat retreat-style holidays that may Serve the same purpose.
If your organization can afford to do so, consider implementing “No Meeting Mondays” or something similar, essentially blocking time for employees to focus on different work and suffer from meetings Being or being burdened with heavy workload.
3. Take the Team Out on Company Off sites
If you really want to give your employees a break, let them have fun somewhere else to get their mind off the stress of the workplace and bond with each other. The possibilities are endless: you can go to a vineyard, have a drink together at a local pub, watch a baseball game, or have a picnic in the park. The activity you choose is not important. To overcome the day-to-day stresses at work, the feeling of getting out to do something fun together is more important. This will not only help reduce workplace stress, it will also help your employees make personal connections and work better together as a team.
4. Consider Flexible Work Schedules
If any of your employees have children or older parents, the demands for work and home life can quickly become overwhelming. Allowing employees to have a flexible work schedule will give them time to care for the people they love, and in turn allow them to be more present at work while they are there. If your employees perform tasks that can be done remotely, consider days where they can also work from home if it makes their life easier. Modern tools such as Slack and Google Hangouts can still keep communication lines open.
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