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FM Analysis HR Outsourcing Contact:
Sharon Crooks, Director HR Services Tel: 0845 299 0343 Email: Sharon@plusHR.com
Sharon Crooks is Director of HR Services at plusHR, a specialist People Management organisation providing Outsourcing, Consulting and Technology services to clients across all business sectors. plusHR combines genuine expertise in people management with leading edge technology to provide HR services which are high quality and cost effective.
What is HR outsourcing?
Outsourcing any service or activity involves engaging an external supplier to undertake activities on behalf of the client organisation. It is most commonly driven by a desire for cost saving or to reduce headcount. Outsourced HR can range from basic administration and payroll, right through to employee relations advice and strategic people and change initiatives.
Why should companies outsource their HR?
While many organisations outsource activities which they consider to be ‘non-core’ to their main purpose, such as security or credit control, decision makers may struggle with the idea of outsourcing people-related activities such as HR, as the people in any organisation are critical to its success. Unlike services such as cleaning, or maintenance, which can have very tangible and measurable outcomes, the value of outsourced HR services may be perceived as difficult to evaluate.
Ironically, however, the right outsourced HR provider can offer a much more
comprehensive service to the employees, managers and directors of a company than a small internal HR team is able to.
Getting the basics right for pay, benefits, pensions and maternity leave entitlements, for example, is absolutely critical for the credibility of any employer. Depending on the size of the organisation, this could be a full time job for an in-house HR administrator. Employee relations issues such as grievances and disciplinaries can be complex and time consuming for line managers and very costly for the organisation if they end up at an Employment Tribunal. Without sound HR advice, this is too often the case. Small and medium sized companies can’t afford to employ a full time employee relations expert, but help lines and websites must by their nature provide very generic advice, leaving the line manager exposed to making ill-informed and costly decisions about people issues.
A good outsourced HR services provider can provide accurate administration, and specific and relevant employee relations advice, at a fraction of the cost of employing a full HR team. The very best providers can also offer strategic HR advice, and practical support
with restructures, relocations and other organisational changes, ensuring that the client stays within the law, and keeps their employees motivated.
What are the benefits and challenges of HR outsourcing?
The benefits of outsourcing HR to a high quality provider are lower costs, reduced headcount, access to responsive expert HR advice when required, and the reassurance that the risks of making poor people decisions have been mitigated. For small and medium-sized companies, the additional advantages include a ready- made set of legally compliant HR policies and procedures and access to a HR system which would be prohibitively expensive if it was purchased on a stand-alone basis. For start up or fast growing businesses, the scale of the outsourced HR service can be adjusted to meet the changing needs of the organisation.
A good outsourcing services provider will also continually invest in its people to offer clients access to the latest skills, thinking and professional knowledge. This is increasingly important in an area such as HR which has spawned a number of specialisms in recent
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