Is the HR service outsourcing a solution companies have been seeking

Is the HR service outsourcing a solution companies have been seeking

Human resource is one of the most critical and highly valued departments in any organization. The responsibilities of the HR department are to deal with the well-being of the employee, manage their payroll, fulfil the pre and post recruitment procedures, look after the firing, hiring and all things in between. As this department carries the responsibility of handling the most critical data in a company, the job of the Human Resource Management plays a vital role in the business management and growth at any level. No matter how small a business is, the need for the HR department in it remains indispensable. It’s been noticed that big companies prefer to keep their HR managed by an in-house team, however, a new trend of availing the BPO services has made it even easier for some small-scale companies to focus on their core areas and stop worrying about other subsidiary matters.

A human resource department in any company is responsible for taking care of employee’s well-being, regardless of on what scale the company is run at. The issue that small companies often have low budget to look after the affairs of the business, they like to outsource the HR services to the BPO companies where they collaborate to become partners in all subjects related to human resource, that include hiring, firing, interviews, benefits and everything that comes under the umbrella of the HR.

These BPO service providers that are equipped with the latest technical knowledge and know how to handle this business with updated methods and micromanage all the hr affairs at a minute level. This leads the outsourcing company to get an extra edge over all the contemporaries as it can excel in the expert field and worry less about the administrative matters.

The HR outsourcing services can be divided into four main categories PEOs, BPOs, ASPs or the E-services. The operations that these firms are responsible for finding every bit of detail to ensure the outsourcing done right. If a company is investigating offers, it’s essential to find what the outsourcing fun has the potential to offer.

Professional Employer Organization

PEO, a Professional Employer Organization takes all the responsibility for the HR of a company. In other words, a PEO becomes a member in all the affairs of an enterprise and works as a co-employer in a company, taking full responsibility of the employer. These PEOs also primarily look after the matters related to hiring, firing, along with the amount of money that the employees are making every month. The professional organization and the company become partners, with the PEO taking up the task of managing the HR related affairs and the company looking after other aspects of a business they are involved in.

This new trend of contracting with the BPO has led to many companies growing massively, as they can better concentrate on the core areas after giving away the duties of HR to a vendor. The definition of the idea of an HR BPO service provider can be explained by considering that the operations the BPO gives are essentially related to the legal side of the employees’ issues. It should also be remembered that many BPOs dealing with the HR matters like to use the term PEO for themselves. They handle every aspect of HR including the payroll and benefits but do not become legal partners of the business.

E-services are those HR services that are web-based. Both BPOs and ASPs are often referred to as e-services.

Business Process Outsourcing is an all-encompassing term that refers to different kinds of businesses being outsourced in different ways. The services of BPO are not limited to just the field of HR. The reason firms like to contact BPO is their ability to apply the latest technology to use for the enhancement of the process. The department of HR in any company is given an extra consideration, as its an important organ of business management. When BPO services are taken for HR management, the firms are assured that the best and the latest technology will be incorporated into the vendor. Services like self-access and HR data warehousing are two most important tasks that are managed by the HR BPO.

Application Service Providers (ASPs) are the other vendors that develop a software for a company and rent it to the users, with some ASPs keeping the host rights with themselves. There are some very well known software that have been used by many companies as an internal system of HR management. Another option that is provided to the companies is the formation of a customized software for the use of company according to their needs. These software are developed by the vendor and the backend is managed by them too, while the company makes use of the benefits that the software gives. The basic tasks like employees’ attendance, payroll, benefits, data can easily be organized through these software.

As the world is becoming digital, the phenomenon of companies subscribing to the e-service that include BPOs and ASPs are becoming common.

As businesses are becoming more and more reliant on BPOs for many services, the fact should not be overlooked by the companies that many names delude the firms and business owners get carried away by the fancy proposals they present. What’s essential for a company when deciding to take services from a BPO is to find out what their actual needs are and whether the vendor they are signing up for, has the capability to come up to the demands of the business owners.

At the time when the outsourcing of HR functions takes place, there are some terms and conditions that the business and the vendor agree on. In most cases, the HR services are given on an all or nothing basis, which means that the vendor company will either look after all the affairs related to HR or will do nothing. While in rest of the cases, the service offered have been discussed and thought out about, the vendor and the company owner split the HR management where at the time of hiring, the opinion of the management of the company is also taken in account. The services that the HR BPO service providers give include :

  • Administration of the payroll, which includes checks, handling taxes, and dealing with sick time and vacations.
  • Employee benefits like health, life and medical insurance, 401 k plans and cafeteria plans.
  • HR management includes recruiting, hiring and firing. this also includes entry interviews, exit interviews and wage reviews.
  • Risk management, workers’ compensation, dispute resolution, office policies, handbooks and safety inspection are part of the risk management.

Some additional services can also be offered by the BPO, services like on-call consultation, support or even training to settle a dispute can be provided. This way the vendor does risk management for the company too, to not leave any loophole in the service that’s being offered.

Usually, the online services are very limited in their utility, as not all queries can be addressed through the web or a phone call. No matter how limited it may be in its approach, the BPO or an online service just gives an advantage that the employee can reach the online service at any time of the day, view information and make changes too. Many software will give people the access to view their benefit plans, read policies and amend the changes.

Final Word

The biggest reason and the greatest advantage for which the companies turn to avail HR services is to focus on their expert area and derive profit from their businesses. HR outsourcing is becoming a fast-growing process and many companies are now signing up for them to progress and excel in their core areas.

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