Outsourcing companies and Human Resources

Being able to give undivided attention to many details, HR outsourcing companies are able to guarantee all papers are filed properly, while your company complies with all tax and employment requirements. A third party accounting agency ensures trustworthy financial figures and avoids opportunity for fraud. Therefore, many small businesses that outsource human resources may experience an increase in workplace efficiency and high quality of work by being able to devote more time to doing what they do best, rather than necessary paper work.

One factor that has been critical to the growth of outsourcing is its potential to offer cost savings. It’s a controversial point, not least because those savings often mean redundancies. Phil Clarke, a director of HR consultancy Independent, is ‘convinced’ that cost is still the number one driver of outsourcing decisions, whatever spin outsourcing providers or their clients may put on it.

The decision of whether or not to outsource can be straightforward if you’re a smaller organisation: if you don’t have the expertise and can’t afford to hire another person, it’s a no-brainer. For larger companies that have ongoing HR needs, it’s perfectly feasible to bring specialists in-house, or use a mixed approach.

Cost reductions were roughly 20 per cent when you factor in management time saved, and the pre-interview screening process improved too, so that five jobs were offered for every ten candidates interviewed, as opposed to the usual three. ‘The commitment of the line managers doing the interviews increased tremendously because they were seeing better people,’ says Hall. Of course, outsourcing companies arrangements don’t always go smoothly, and they are easier to get into than to get out of, according to Bevitt. ‘They can go drastically, drastically wrong. The danger is, if you outsource, especially if the employees don’t transfer