Human Resource Outsourcing (HRO) has grown tremendously among the corporate regime. Small businesses especially find it one of the most feasible alternatives to hiring their own HR staff. Organisations today are struggling to gain competitive edge with least expenditure and HRO is a step towards achievement.
Present economic climate pushed organisations to explore new ways and remain abreast with changing demands. Business leaders can play more strategically by outsourcing various HR operations. Most organisations shaped themselves as HRO firms to help manage payroll, advantages and HR administration, recruitment, selection and other such tasks.
Classification of full & partial outsourcing
Full outsourcing is when companies decide to contract-out all HR functions. Businesses consolidate major HR operations; exploit infrastructure and experts already housed in outsourcing agencies. Primary aim of HR firms is to lower cost and increase business productivity for which having expert personnel and state-of-the-art HR system.
These HR specialists are versatile catering all HR functions from recruiting to payroll, employee grievances, perks and rewards, keep compliance with state regulations so on. As a result, companies no longer need to hire, train and implement HR team and department in-house that’s a real hassle rather subcontract the tasks.
Meanwhile, a few firms look forward to have their own HR team that keeps them focused on a particular activity while outsource the rest. This is known as partial outsourcing that keeps full-time HR personnel to be onsite for specific issues. Many times, issues dealt within an organisation by HR staff includes monitoring and maintenance, employee relations and strategic planning while HRO mainly handles payroll, needs administration, recruiting and record keeping.
Who primarily uses an HRO firm?
Small to midsize companies having employees between 25 and 1,000, typically sublease their HR operations. They expect HRO firm to be their strategic partner thus relieving them from intricate human resource responsibilities and enable them to focus on core business targets. Cost savings and business focus aside, other benefits are employee relations and improved team cohesiveness.
HR outsourcing agencies have access to skilled and highly professional clients that help companies grow and achieve their primary goal. Few subcontracting agencies are more generalised dealing with various services. As every company differs to that of other, you should be specific with requirements.
Why company outsource HR?
We’ve highlighted some of the biggest reasons why companies outsource HR. The results are general as per survey conducted by Society for Human Resource Management (SHRM).
- Focused strategy
- Improve compliance and accuracy
- Lack of in-house experience
HRO typically occurs when a firm instructs external supplier to take control of basic human resource functions to meet organisational needs. Payroll outsourcing is most common being a protracted managerial task for employers and technical expertise required to run it efficiently.
HR outsourcing in UAE is common ever since the region devoted more towards business development. You’ll find world’s leading firms commencing major operations in UAE with Dubai on top charts.
Business organisations proceed with HRO as a move towards cost reduction however it has gone beyond the usual paradigm. With companies getting more value driven, industrial expansion and virtualised infrastructure, there’s a dire need for a professional HR staff that monitors everything effectively. Companies witnessed financial stability and awareness to launch more strategic campaigns for success.
About the author:
Sheharyar Ahmed is a Digital Marketer, Working with Recruitment Agency in Dubai. He writes about HR recruitment tips, leadership, HR Management and in particular UAE. He likes guitar and linux mint. Also a business coach and author of local News Paper.