6 Tips to Help You Successfully Outsource Your HR Operations

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Businesses have taken to HR outsourcing on a large scale in recent years, including core activities like internal job postings and promotions. Apart from small businesses, which tend to find it difficult to maintain full-fledged in-house HR departments, big organisations are also choosing to outsource HR operations to streamline their work process.


There are many advantages to HR outsourcing that companies can enjoy—but these can only be realised provided outsourcing is done right. We outline six key steps companies should take if they are embarking on an HR outsourcing campaign for the very first time.

1. Find a Valid Reason

This is the first step towards successfully outsourcing your HR operations. It is important to be clear about why you need to outsource your HR functions and how it will benefit your company in the long run. Having clear reasons for outsourcing will help you frame your goals and assist you in selecting the right outsourcing partner. It will also be instrumental in devising the right assessment metrics to measure the performance of your campaign.

2. Tell Your Employees

Once you have decided to go ahead with the campaign, you will need to break the news to your employees. It is imperative to do it in such a way that your employees do not feel any insecurity over the move.

Employers should justify the decision to their workers with the help of valid reasons. The management should explain how the decision will benefit the company as well as individual employees. Employees in the HR department who will be made redundant due to the move must be made to understand that they will be shifted to jobs where they can be more productive and also learn new skills.

3. Get a Trial Run

Requesting the outsourcing partner to do a trial run is the best way to allow the management to get a first-hand glimpse of how the campaign is working out. Any drawbacks that become apparent at this stage can also be ironed out. It is best to refrain from going ahead with outsourcing if you are not completely satisfied with the trial run. Trail runs are a great way to test different outsourcing partners before awarding the final contract.

4. Plan Your Outsourcing

A key part of HR outsourcing relates to planning the campaign so that it can be launched without any major problems. It makes sense to avoid farming out all HR functions at once. Start with the basic ones like attendance and payroll while keeping the strategic functions with yourself. Since every company faces some unique challenges with regard to HR, it is important to brief your outsourcing partner about your pain points to enable them to devise a suitable solution. Strategic HR initiatives like promotions and leadership planning can also be outsourced once you develop adequate confidence in your outsourcing partner.

5. Guide the Vendor

Once the outsourcing process gets underway, you must handhold the vendor until they become conversant with your processes. Your outsourcing partner must understand the way your organisation functions if they are to customise workflows and processes as per your requirements. You must mentor the agency for a while until they are able to work independently without your guidance. Remember to communicate frequently and provide feedback where necessary. Even after the initial period is over, keeping your channels of communication active will be crucial to the success of the campaign.

6. Build the Relationship

Just because you don’t need to handle day-to-day HR activities doesn’t mean you can wash your hands off it. It is true that once you have decided to outsource your HR operations to an external entity, you will not have to manage daily operations. But it is also important to remember that by outsourcing your HR operations to a vendor, you are actually making them a part of your organisation. They are managing your most valuable asset—your employees—which effectively makes them a key part of your success.

Think Through the Decision

Outsourcing HR functions has many advantages but also comes with several complexities. The decision to outsource should be taken by the management after giving full consideration to its impact and creating a comprehensive rollout plan to ensure its long-term success.

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