Why Australian companies gradually shift to HR outsourcing? This question serves both as a statement and a curiosity that form part of some recent investigations about the phenomenon around the intense and growing interest in outsourcing human resources management and processes.
One study, the APAC Market Pulse Study, was one of the recent surveys conducted by one leading company to find out some compelling reasons that drive Asia-Pacific companies to outsource their recruitment roles. The study also look carefully into the current state of the HR industry across Australia, China, Singapore and Hong Kong markets.
A Complex and Costly Affair: HR Management
Competition in a globalised world is one big factor why the effective management of human resources staff is necessary. Globalisation is a driving force why there is a need for companies to respond to HR management challenges. With globalisation, complex and demanding processes that need to be managed emerge and companies cannot simply neglect how they’ll smoothly manage staff and talent needs.
With business success comes growth in the number of staff that need to be hired and managed to meet the demand. The more that your staff population grows will only mean one thing: increased costs and more time required to manage the old and new staff.
Managing employees is not only challenging, but also a costly affair. Without standardised processes in managing human resources, companies can only wish for the best. Key challenges here include being able to take full advantage of employee performance and using top talents effectively.
Admit that HR management is complex and without you being conscious and aware what’s attached to this characteristic will leave you unprepared to deal with undetected problems that will come your way. Short to long-term problems can create roadblocks that impede performance of your employees and impact the bottomline of your business.
It is therefore imperative to seek the help of some parties who will to take care of the process involved in human resources management. Specifically these tasks include taking care of recruiting, hiring, and managing benefits. The good news is that there are plenty of other reasons to seek an outsider provider of professional HR outsourcing.
Benefits of Outsourcing HR
Not surprisingly, HR outsourcing is gradually being adopted as companies see the business strategy as an important solution. Not only are companies in North America and Europe who adopt the business practice, Australian firms among other Asia-Pacific nations consider the role that HR outsourcing play in addressing key challenges ahead them, including employee retention.
With HR outsourcing, your company is eased off the responsibility of administering and handling human resources functions and issues. HR outsourcing also allows you to enjoy the three main benefits of cost reduction, process efficiency and control.
According to these studies, companies outsourcing their HR’s transactional processing, management and time and attendance reporting were able to reduce by 40% their overall operational cost. Some studies point to such percentage as time that can be directed toward core activities of the business that actually bring the money in. Other key factors why HR departments are being outsourced include standardising business processes.
Making HR Outsourcing Work
Even after you’ve hired or signed a contract with your HR outsourcing firm, there are still some issues to consider. You are well aware that it is necessary that your internal HR department do function properly and this is often achieved when department personnel in your company work with the employees of other departments.
How can HR outsourcing help ensure that there is a seamless and smooth run of your personnel management department? Your service provider will help you accomplish the challenge through one and many ways. A third party HR department can provide even the most menial tasks of providing prompt response to requests and the implementation of important transactions through a variety of channels, such as web conferencing, telephone support and email correspondences.
Plus if you are a small business enterprise, you cannot simply afford a fully operating HR department because not only this is costly but your office space and your limited human resources in-house may not be sufficient. However, that’s how HR outsourcing firms can help you operate an HR even in a manner similar to larger companies.
Your HR outsourcing partner can provide you with access to a variety of related services and products that can help you leverage your HR best practices. This assortment of services may include handling of your company’s payroll processing, benefits, tax and compliance concerns.
HR Outsourcing Adoption Among Australian Firms
Gone are the days that outsourcing is only viewed as a cost-cutting tactic. More and more, companies regard outsourcing as a strategic solution. Some experts are delighted about the massive shift in the way HR executives are outsourcing or considering to outsource their companies’ HR functions.
Derived from the same APAC findings, it is revealed just how much Australian firms are embracing outsourcing their HR functions to remedy their countless HR challenges such as addressing skills gap problems.
Beyond the functions to outsource, the same findings show that companies currently outsourcing regard training as a prime priority among HR executives, hoping to increase their investments in learning and development.
One key figure noted what the study reveals about Australian firms: “Australian companies are continuing to consider outsourcing as a compelling solution to many of the HR challenges cited – skills shortages, recruitment and employee development and many more – and they are also interested in thinking about new ways of running their HR and their business.”
