Top 6 Reasons for Hiring HR Functions

Top 6 Reasons for Hiring HR FunctionsIf your company is considering outsourcing your HR functions, then you need to know that it’s a complex process and needs a lot of forethought. In recent years, the addition of FMLA, Obamacare, and ADA have turned HR into a challenge with an infinite series of narrow hoops to jump through.

For HR professionals, instead of spending their time behind developing employee engagement initiatives, tasks like benefits administration and compliance take up a majority of their time. There are several benefits to HR outsourcing. If you’re planning to join this latest trend of HR outsourcing, you need to read on.

According to a survey by the Society for Human Resources Management (SHRM), where hundreds of companies participated, it was found that there were six common reasons why they chose farming out their HR functions:

26 percent – to save money

23 percent – to focus on core competencies

22 percent – to improve compliance

18 percent – improve accuracy

18 percent – due to lack of in-house experience in handling HR functions

18 percent – to benefit from technological advances such as big data for strategic analytics

There are the six most common reasons why companies chose to outsource.

In the survey SHRM also asked what tasks were outsourced. Below is a list of the 10 most commonly outsourced tasks:

84 percent – 401 (k) administration

84 percent – employee counseling

74 percent – retirement planning

73 percent – pension administration

72 percent – temporary staffing

68 percent – backgrounds checks

57 percent – training as well as management development programs

54 percent – executive coaching

53 percent – employee benefit administration

49 percent – payroll

For smaller companies looking to evolve, HR outsourcing is a great way, for they can hire talent at cheaper prices, and rather focus on their core operations that involve products and services. By doing this, HR professionals can get more time to look after high-priority strategic tasks such as training and development, performance management, etc. For larger companies, compliance can be a headache and is something seen along the lines of legal liability. By outsourcing such functions, they can add some extra layers of protection from the risks involved, while their human resources team looks after more strategic HR initiatives. After all, nobody wants fines and penalties and compliance issues that later turn into a multi-million lawsuits!

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