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Does HR Outsourcing Mean Loss Of Control Over Your Business?

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One of the chief criticisms of HR outsourcing has been that it requires surrendering some degree of business control to the service provider. That is far from true. HR outsourcing need not entail having to choose between convenience, efficiency and cost savings on the one side, and maintenance of business control on the other. As we shall see, it is entirely possible to outsource your HR functions while maintaining necessary control over your operations at the same time, eradicating the need to make difficult choices.

Better Control Through Outsourcing

Many companies view HR outsourcing with trepidation. The thought of letting a third party take over all employee-related matters, including recruitment, payroll, benefits management, performance management, and compliance, can be intimidating to say the least. But as a deeper understanding of HR outsourcing will reveal, these are baseless fears whose effect is to prevent businesses from exploring the wide-ranging benefits associated with the activity which is becoming increasingly popular worldwide.

Below we explain how HR outsourcing can actually consolidate—rather than weaken—management’s control over the business through various means.

  • You decide how much work you wish to outsource

The first thing to understand about HR outsourcing is that you decide how much work you want to outsource. The work contract and accompanying service agreements lay down all the terms and conditions in detail, including the extent of the work that the vendor will take on. Once outsourcing is underway, the client still calls the shots by retaining the right to make all important operational decisions regarding HR.

  • You get support staff, not a parallel power centre

The goal of HR outsourcing is to assist your business, not become a parallel power centre. When you engage the services of an HR outsourcing vendor, you get access to a team of highly competent support staff with expertise in areas related to your sector. You also get access to a dedicated account manager who will be the single point of contact between you and the team. The team will perform all day-to-day functions and provide regular reports as specified in the contract. Clients are encouraged to contact the account manager to seek information, convey decisions, provide feedback, and so on, ensuring that the reins of the operation stay firmly in your hands.

  • You get to focus on things that matter

One of the major advantages of HR outsourcing relates to the freeing up of resources from non-core activities such as payroll and benefits administration, allowing their diversion into core work activities. It enables the firm to place greater emphasis on actual profit-generating activities instead of spending precious resources on low-value undertakings. The proper allocation of resources is a key means to enable managements to focus on real issues such as business growth, consolidating their hold over the company in the long run.

  • You benefit from a holistic HR solution

Companies may outsource different parts of the HR process such as recruitment and payroll, or they may outsource the complete process. The latter has the benefit of enabling the development of holistic solutions compared to the delivery of results in silos. It makes the formulation and implementation of an overarching HR strategy much easier for the company, ushering greater coordination, resulting in more efficient HR operations.

  • You have access to improved cash flow

HR outsourcing vendors harness economies of scale to bring high-quality services to clients. Their access to specialised skills and technology enables them to get work done faster and more efficiently, compared to running an inhouse operation. The presence of experts on the team, combined with advanced software, reduces the scope of errors, protecting you from fines and penalties vis-à-vis compliance. The cumulative effect of these measures is cost optimisation and consolidation of control through improved cash flow.

Using HR Outsourcing to Grow Your Business

Outsourcing HR functions leads to greater, and not less, control over a business. Clients can make use of multiple instruments, including the contract and service agreements, to exercise adequate control over the operation. They are also at liberty to terminate the arrangement as a last resort if they feel the vendor is not able to meet their expectations.

HR outsourcing is designed to help businesses optimise their resources and facilitate their growth. It can not only ease your HR burden, but also lead to a more satisfied workforce. New-age vendors also offer strategic services including workforce planning, employee relations, leadership development etc. The well-planned use of HR outsourcing by partnering with a reputable service provider can be an important decision with the potential to power your business towards rapid expansion.

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