Identifying the Best Human Resources Outsourcing Services
The human resources department of a company handles a variety of diverse functions. The department is in charge of staff recruitment, promotion, redeployment, and dismissal. It is also responsible for staff training and development. All the staff compensations and corresponding deductions are done by the HR department. It manages the staff medical programs and ensures that employees have been provided with fringe benefits such as pension and retirement schemes. If a company fails to adhere to many employment and labor laws, the human resources department will be held responsible.
Human Resources Outsourcing
Unless your core business is to provide human resource services, managing the many human resources functions can really distract you from your core business. Fortunately, with human resources outsourcing, you do not have to do all the human resource functions or even set up a full-fledged human resource department in your company.
Human resources outsourcing refers to the procedure of assigning a third-party company to carry out some or all of your company’s human resource activities and functions.
Why Outsource Human Resources?
Companies outsource their human resources because of several advantages that are associated with the practice. First, outsourcing human resources saves a company on various business costs such as social security, medical care, workers' compensation costs, and other costs required to maintain employees such as office space, desks, and equipment.
Secondly, HR outsourcing enables the company to concentrate on core business functions. Time and money that could have been spent on doing the outsourced human resource functions is spent on the core activities.
In addition, some human resources functions, such as payroll services and recruitment, are effectively done when done by experienced and specialized experts. HR experts that have conducted several recruitments for other companies are likely to get a perfect employee for your company as compared to when you directly recruit.
What Types of Human Resources Outsourcing Services are out There?
A company can choose to partially outsource its human resources or completely outsource the human resources. In partial human resources outsourcing, HR responsibilities are shared by both the company and the contracted vendor. Also, both parties share HR information and retain control over the HR activities. For complete outsourcing, the contracted vendor takes responsibility for all HR functions with the company or its HR manager only taking a liaison role, focusing only on managing the vendor-company relationship.
There are four types of human resources outsourcing services:
- Human Resources Outsourcing: Most of these types of outsourcing services are ideal for large businesses, preferably with 1000+ employees. They allow the businesses to select the HR services that they want to outsource. If human resources functions are partially outsourced to the Human Resources Organization (HRO), a co-management relationship is established between the HRO and the business. If all functions of human resources are outsourced, then the HRO takes full responsibility of the HR functions. Most large organizations only outsource most of their administrative and tactical roles.
- Professional Employer Outsourcing: These types of outsourcing services are ideal for small and mid-sized businesses (businesses with less than 200 employees). Professional Employer Organizations (PEO) normally handles all human resources functions. To formalize the agreement, Professional Employer Organization enters a co-employment relationship with the company whereby the PEO becomes the employer of record while the company becomes the on-site employer. As the employer-of-record, the PEO takes responsibility for staff payroll, performance management, background screening, recruitment, taxes and employees’ compensation, and other administrative tasks.
- Administrative Services Outsourcing: Administrative services outsourcing only provides companies with administrative services such as payroll management services, pension administration, employees’ safe management, making direct deposits, and filing taxes using your federal employer ID number (FEIN). The role of the Administrative Service Organization (ASO) involves handling of compliance and legal questions. The ASO must be provided access to employees’ insurance, compensation, and medical benefits. To determine the ASO costs, a company’s employee base and employment risks related with keeping them is used.
- Application Services Outsourcing: In application and facilities services outsourcing, contracted vendors only provide technological applications and physical facilities to help human resources functions.
What Type of Software is Used?
SaaS technology solutions such as the 8x8 unified communications and contact centers have everything you require to manage your human resources functions better. These SaaS technology solutions enable you to scale operations up or down with ultra-fast deployment. They also improve first-call resolution with skills-based routing and multi-channel capabilities; they monitor, record and amplify results, with great and instant reporting and integration features to third-party applications such as workforce optimization software.
Find a Service That Meets Your Needs
Different human resources outsourcing has a varying impact on a business. Never go for an outsourcing service that does not meet your needs. Choose an outsourcing service that uses world-class SaaS technology.
Your business has enough on its plate. Outsource what makes sense for your business, choose a world-class SaaS technology solution and focus on what's important: your clients. Call 1-866-879-8647 or fill out an online form to request a no-obligation quote from an 8x8 product specialist.