Human resource (HR) outsourcing involves the transfer of responsibility or management of certain HR functions to an external provider. Most of these functions are generally non-critical and non-confidential tasks such as payroll and benefits processing, grievance handling, and rewards management.
Today, HR outsourcing is said to be a growing trend, even among large businesses and organizations with ample budgets for a full-service HR team. Outsourcing to providers like call center allows your HR team to focus on strategic programs and policies, instead of on rote, repetitive tasks.
However, outsourcing to a third-party vendor comes with its own set of issues and challenges. If you’re thinking about seeking an outsourced HR partnership, here are some best practices that can help your organization seamlessly transition to this setup:
HR Outsourcing is a popular practice in multiple industries. It’s believed that businesses nowadays adapt outsourcing measures simply because of the many advantages that they bring. This is, however, notwithstanding the fact that partnering with a third party still needs assessment.
Check first your own situation whether or not outsourcing is the best for your business. Start by asking yourself, ‘Does the current situation call for outsourcing?’ It’s only when you have an affirmative answer that you should start digging deeper into what outsourcing techniques you should apply.
Second, examine whether or not the pros outweigh the cons. Determine if your current in-house HR team has enough experience, time, and manpower to handle outsourcing. It’s at this point that you can then open the discussion with your HR department as to which functions are advantageous to be outsourced. Take note that you can’t just outsource every aspect of HR management, as there are some pertinent management functions that are best handled in-house.
2. Vet Providers
Because of how popular of a practice outsourcing is, there are now so many call centre organizations and agencies that offer HR-related functions.
Remember that the perfect provider should bring in loads of benefits for your HR team – one of which is to improve the skills of your young and new employees. This is the reason why it’s very important to compare your options first before finally signing up with a third party.
To start, here are some points of comparison to be particular about:
Ensure that the agency you’re hiring actually has the right technology for the job function you need them to do. Because this is the core focus of their job, it’s only fitting to expect that they have all the necessary tools.
Go through the qualifications and expertise of the members of the agency you’re outsourcing from. You need to have that assurance that they’re truly experts in what they do.
3. Evaluate And Negotiate Outsourcing Agreement
Whatever tasks you’ve finally decided on to outsource, be sure to evaluate and negotiate your outsourcing agreement. You’ll want outsourcing to work for you and not against you. Be sure to read the fine print with the help of your company’s legal and compliance officer.
To start, check the scope of services so that you’re on the same page on the expectations of the partnership. This avoids any confusion or dispute later on between you and your outsourcing partner.
Along with that, be sure to check and compare the inclusions of the base price of the services. The amount you pay for may increase, depending on the scope of work to be done. The only way to be certain that you’re getting value for money is by comparing the price offered by at least three different agencies’ package agreements.
4. Consider Data Privacy and Security
Lastly, don’t forget about data privacy and security – these can undeniably be among the biggest disadvantages of outsourcing. Depending on the HR functions you choose to outsource, this can mean employee data is out into the hands of a third party. You then have to ensure that your data is always protected and never compromised during the outsourcing agreement.
To proceed, start by being firm and specific about data access requirements. Limit access only to those who absolutely need to get hold of those data. Iron out your data storage and transfer requirements as well, so they’re always kept in a centralized location and not carelessly passed around from one person to another.
Lastly, ensure that your service agreement with the HR outsourcing company or call centre you’ve partnered with outlines the different data privacy and security protocols you wish to have and enjoy under a working agreement. Partner with your organization’s privacy and data security officer while doing this.
Outsourcing business activities has been quite a popular practice nowadays, especially repetitive and menial HR tasks. Moreover, the fact of how many more companies continue to outsource is enough to show that HR outsourcing is definitely here to stay.
When it comes to your HR department taking the step towards outsourcing, the four items enumerated above are some of the best practices to keep in mind. Continue practicing and learning so that when you get the ropes of it, you’ll begin to enjoy some of the compelling advantages that come along with HR outsourcing.
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