PRINT & READ The Benefits of Outsourcing Your HR Services
Since I founded The Kennion Group in 1969, I’ve watched the functions of Human Resources transform faster than über cool technology as it evolved to keep up with the global marketplace. The previously known business model that compared big success to big size by boasting of their own HR department, supply warehouse, and number of offices, has given way to a new set of rules that includes spinning off former in-house procedures. This new lean and mean way of doing business is called, “business process outsourcing.”
For many years, companies have been forced to invest a lot of time and money with in-house HR infrastructure or work with multiple external providers. With all of the compliance regulations and various administrative headaches they’ve had to deal with as well as escalating costs in the current economy, I’m seeing more and more business owners who are looking for different tactics and improved strategies to help them streamline their operations.
Although outsourcing is not new, the bundling of business services that can be easily handled by one provider is quickly gaining in popularity as companies – large and small – are moving their HR functions toward business process outsourcing. Kind of like a one-stop-shop. No longer does a business owner have to find someone to handle their payroll services, another vendor to take care of group health insurance, and yet another to administer plan benefits. They can now hire a provider like The Kennion Group who offers a full range of services to help design, manage, implement, and communicate the right benefit package to support specific business objectives with cost-effective solutions. This includes reducing risk, controlling costs, and basically enhancing and implementing all aspects of an in-house HR department without the overhead costs.
The number one reason businesses are looking for providers that offer multiple solutions is to save money. With the current economic climate, business owners are looking at everybody’s role within the company and how the HR role is not necessarily a revenue generating or producing function – albeit a very necessary one. However, statistics show that business process outsourcing can lower the total cost of HR service delivery by 20-to-30 percent. That’s a huge cost savings! Plus, it gives business owners the time and energy to focus on their core business and increase profits.
Another big reason HR is outsourced is keeping up with the fluctuating landscape of regulatory compliance, which was revealed in a study by the Everest Research Institute. I have found there is a tremendous amount of pressure on HR professionals to stay on top of the current legislative changes as they pertain to benefits regulations, claims management, and company directives.
As a company grows and changes, so will its technological needs. I know firsthand what a pricey and complex undertaking this can be. From a cost-reduction perspective, business process outsourcing can reduce operating costs while improving HR delivery by providing the state-of-the-art framework to do so.
Based on all of our work with our clients, we’ve seen more and more people coming to us because of the economy and how the business climate is. There is a real demand for end-to-end solutions under one roof. This is based on the fact that people need to focus on their business and not necessarily all of the functions of an HR department and administrating employee benefits, while staying on top of compliance regulations and keeping investors happy.
Finally, keep in mind that working with business process outsource company is a lasting partnership – kind of like a marriage; not a one night stand. A good provider will be committed to helping you make cost-effective, long-lasting strategies, while identifying and assessing the risks within your company. Make sure the provider you are working with has the knowledge and experience to administer the right solutions and HR programs to your employees and on behalf of your business. Ultimately, you want to meet the needs of your employees while also achieving your own business objectives. A good benefits administrator and provider can help you do all of this and more.
Reader Comments (1)
Great article!
I have to agree with all these benefits on outsourcing the HR Service. However, like any other stuff, it also has its disadvantages. But there are a lot of companies, who know a lot about outsourcing. They have techniques to lessen or eliminate those disadvantages. It is possible that this may be avoided.
Study and examine all factors very carefully before deciding to outsource. Also consider your employees' interest. If your company is still willing to outsource, don't let this disadvantages stop you. At least you could take comfort of the fact that you're very well informed before entering the world of outsourcing.