HR outsourcing refers to an agreement between an employer and an external party provider. In such a relationship, the employer transfers the management and responsibility for certain HR functions to the external provider. There are various types of HR outsourcing options available to employers in the market. The options can be specific such as outsourcing one particular aspect of one HR function like applicant tracking for affirmative action purposes, or can be broad as outsourcing the complete human resource department.
There are various terms and types of arrangements prevalent in this process of HR outsourcing which is outlined below-
HR Shared Services
This term refers to a consolidation of business functions within an enterprise to a highly skilled internal department or group. Under the shared-services model, the administrative functions can be handled in-house or outsourced to human resource outsourcing firms. When the services offered by the shared services group are combined into a central operation, they are often known as shared-services centers. Broadly defined, the shared services model is marked by the consolidation of administration or support functions for various departments.
What services are included under shared services?
2. Accounts payable and receivable
4. Travel expenses
5. Pension administration
6. Health benefits enrolment
Technological advances and increasingly sophisticated use of Internet communications worldwide have played a vital role in the development and spread of shared-services arrangements in recent years.
Employers take full advantage of flexible options that enable them to turn a fixed expense into a more manageable variable expense—a flexibility that allows the organization to adapt to the highs and lows of a fluctuating marketplace. HR professionals must know about the vendor’s performance commitments and have specific and clear service levels and particular enforcement methods.
Because service levels need to develop and improve over the life of the contract, HR managers are required to document the services existing when their contract becomes effective to make sure that the vendor has accountability.
Benefits of Connecting With a Human Resource Outsourcing Firm Through CONCAT
1 – Administration, including the legalities of employment
Administrative responsibilities and non-key function activities can tax any company, but for small businesses mainly, managing human resources can be a tedious and heavy task. When you operate a small company with limited resources and time, the last thing on your list would be diverting your attention from the core business activities, which is your bread and butter.
Outsourcing human resource activities can bring down your administrative workload and free up your time so that you can pay more focus on your crucial function business activities. The manager responsible for employing staff needs to know what legal obligations must be fulfilled. It should be considered even before offering a job. Once the job is offered, the person would require knowledge on administering a payroll process of auto-enrolment of pensions.
HR and payroll outsourcing are common in the workplace due to the complexities of the task at hand. Our HR system assures small business support package provides you with the knowledge you are compliant with employment law. This includes the provision of documents, templates, and forms, along with direct guidance from Concators!
2 – Overall Efficiency
The bucket of tasks that consume your time and reduce your efficiency can be offloaded in a very surprising way. An HR outsourcing firm can manage a whole range of human resources activities and functions that a small business might otherwise outsource to multiple employees- these functions include payroll processing, benefit plan management, training, administration to recruiting, and more.
When you take on board one provider to take responsibility for a range of HR functions, you will reduce time spent on administration and spend less time managing vendor relationships. However, it is crucial to find human resources outsourcing companies that will work with you to provide simple to use and employee-friendly services. Since efficiently managing human resources is essential for your company’s success, it is vital to find a suitable service provider who can offer the right mix of services.
Whether you want a bundled package or you prefer to pick and choose the services you need, we will review the options available to you and are here to guide you through the process. The marketplace is a crowded environment with many companies from which you can choose. Concators have researched and connected with some of the best HR service providers for small-to-medium-sized customers.
3 – The recruitment of new staff
Outsourcing HR services include making sure that the people hired are the most appropriate people for a particular role. They ensure that the staff has the necessary skills, knowledge, and behavior for the company. This is a vital element in running a successful business. It should be kept in mind that the level of skills and qualifications required for a role is positively related to the time and cost the process requires. This type of HR service for small companies will come in extremely useful when facing the hiring process.
4 – Training
Recruiting staff needs a significant investment of time and money. Once employees join the team, they need to use their talent to the optimal level, grow and develop until they feel ready and best equipped and qualified to perform their duties. Training is often considered the “soft option” in terms of budget, and external training is often used as the preferred method. But it is expensive and is not 100% successful in meeting the demands of an individual business.
5 – Staff retention
Once the investments are made in the human resource, the return on investment is realized by getting tasks done and attaining the most from staff members. Appropriate reward and development schemes are made to ensure that the workforce is motivated to work and stay. By outsourcing your HR services and getting this HR advice for small businesses, you can stay assured that these schemes are well taken care of.
6 – Dealing with long-term sickness
One hindrance for a small business is when a staff member is absent for a significant period due to illness. How does the law guide? Is the illness physical, mental or financial? What steps should the business take to guard its interests but be just and fair to the employee, both legally and morally? Outsourcing your HR needs to CONCAT will ensure that you will save your time from such concerns.
7 – Consolidated HR tasks and software
When companies consolidate various entities under one company umbrella, redundancy is visible. In a shared services model, most companies will make certain changes to overcome this problem. This will result in creating higher levels of efficiency and cut down on cost.
8 – Strategy-Driven Approach
An HR shared services model allows businesses to pay less focus on non-key areas such as human resource management, talent acquisition, and retention as they are outsourced. All such processes enable the company to build a better business structure and increase positive business outcomes, which is important for its overall growth strategy.
9 – Consistency
Consistency is a positive factor related to the growth of the business as it allows for processes to be undertaken in the same way each time. This is crucial, especially when taking into the importance of compliance.
10 – Positive employee experience
HR shared service strategy enables companies to avail faster service. In other words, employee requests are met more effectively and efficiently. This type of model leads to employees having positive interactions with HR. Promoting positive interactions between employees and HR creates a better employee experience in the organization.
11 – Policy formulation
A policy refers to a guide for repetitive action in key areas of business. It is a statement or a strategy of commonly accepted understanding for decision-making criteria. Policies are set up to achieve benefits from the various business processes. Every company needs policies to ensure consistency in action and equity in its relationship with employees. Organizations providing HR shared services formulate policies for their clients to efficiently and effectively achieve organizational goals.
12 – Standard operating process
An SOP is a process specific to operations that describes the activities necessary for complete tasks by industry regulations, provincial laws, or even just how a company wishes to set up standards for running the business. Under the HR shared service approach, the company gets relaxation from the time and effort required to set up SOPs and get to enjoy the final fruit. This way, the management team can pay more attention to the key areas of the company.
13 – Payroll administration
Payroll administration refers to the process of keeping records of the working hours of the company’s employees. It involves putting effort into keeping an elaborated record of employees’ cash flow. In big companies, the process becomes more cumbersome and hectic. By using the HR shared service strategy and Human resource policies, companies can save on the time and effort required for such a tedious task and instead devote this saved time and effort to critical functional areas.
14 – Statutory compliance
Statutory compliance in HR refers to the legal framework within which an organization must operate while dealing with its employees. A lot of the company’s effort and money goes into ensuring compliance with these laws, which could deal with a range of issues from the payment of minimum wages to maternity benefits or professional taxes. Therefore, working with statutory compliance companies should be well-versed with the various labor laws and regulations in their country. HRSS model drives efficiency and reduces cost in the statutory reporting process through centralization and standardization, especially by overcoming common challenges faced by all companies in the same industry.
15 – Employee engagement and evaluation
Employee engagement refers to a workplace approach that results in the right conditions for all company members. So that the employees contribute their best each day, stay committed and loyal to their organization’s goals and values, and are motivated to contribute to long-term success, with an enhanced sense of their well-being. An employee evaluation is the process of assessment and review of an employee’s job performance.
Most companies have an employee evaluation system wherein employees are calculated and evaluated regularly. Such tasks require an intense amount of time, effort, and cost, which prevents a company from paying more attention to the key areas. The HR shared services strategy eliminates such hindrances for smooth and efficient functioning.
16 – Succession planning and exit management
Succession planning is a regular process that identifies important competencies then works to assess, develop, and retain a talent pool of employees to ensure a continuity of leadership for all critical positions. Succession planning refers to a specific strategy, which dictates the particular steps to be followed to achieve the mission, goals, and initiatives identified in workforce planning.
It is a plan that managers can follow, implement and customize to meet the needs of their organization, division, or department. Exit Management a.k.a employee offboarding, refers to a process of managing the full and final settlement of employees when they exit from an organization. When an employee is in the exit phase from a company due to various reasons such as resigning, retiring, or being terminated from work, the required paperwork and formalities associated with employee exit need to go through a systematic process.
There are various exit formalities such as exit interviews, clearance from various departments, replacement of the departing employee, and full and final settlement of employee dues. The HR department has a lot on the plate during employee offboarding. By opting for an HR shared services model, a company ensures smooth functioning and efficient management of the human resource in the transition phase.
CONCAT as an Enabler for HR Outsourcing Companies for Micro Business
Outsourcing HR requirements is going to be a more cost-effective and flexible option for a small business.
• Concat will give their input for more advanced HR requirements, ensuring the business gets the highest standard of service.
• It takes the pressure off the business owner and senior managers. This allows them to focus their attention and resources on the matters of running the business but always be in touch with the HR model. Human resources consulting services for small businesses ensure that the management is guided in the right direction.
• Concat works flexibly and can tailor our offer to suit the business and budgetary needs. Get your suitable HR solution with our HR Develop Small Business Support Package.
• There is huge value in having HR management consisting of experts who are ahead of the trends. Concat aims to provide the best possible service. After all, we aim to retain the business as a client.
A small business must always move fast, stay a step ahead in the market and innovate, all whilst being on a tight budget.
Outsourced human resources for small businesses can ensure that the people factor is inefficient and responsible hands and is being handled lawfully. This will remove hindrances from the HR functions and increase efficiency for the business.
CONCAT acts as an HR outsourcing company for small businesses. We offer various HR services for small businesses, including payroll, benefits, recruiting, taxes and training. More uniquely, CONCAT offers a Virtual Chief Human Resource Officer as-well-as an onsite assistance program that puts HR professionals in the office when customers need more help. Most HR outsourcing companies only offer services like employee handbooks, schedules, brochures, and guidelines.
CONCAT will create a robust set of guidelines customized to meet the needs of each client. Our website also offers significant educational resources on a wide range of HR topics. For very small companies, we are well able and equipped to handle the entire HR process. We will work with customers to develop a strategy and strengthen areas where there are weaknesses. We offer services in all areas of HR administration and human resources consulting.