HR outsourcing

How specialists can help your business run smoothly

First published on Wednesday, Jun 24, 2020

Last updated on Thursday, Mar 14, 2024

If you’re an SME (that’s a small or medium-sized business), then you may not be able to afford a full HR department.

It could also be impractical due to office size, location, or insufficient work. You may simply have a batch of HR-related work that needs covering, but hiring full-time staff would be over the top.

The good news is the digital era offers alternatives from which you can effectively subcontract HR services.

So, let’s take a look at what the services can offer to your organisation on a company-wide scale.  

What is HR outsourcing?

It’s the process of acquiring HR services your business from an external specialist. It often has the name HRO.

Outsourcing HR is a viable option for businesses looking for specialists to manage all—or some—non-core HR activities.

There are three main types of HR outsourcing services that most SMEs favour. These are:

  1. Business process outsourcing: Also called BPO, it’s where a supplier manages HR tasks that your business would consider as distinct. That’s the likes of payroll or your hiring strategies.
  2. Shared services: Where transaction or admin aspects of human resources receive management from external sources.
  3. Application services: This is the management of physical and technology-based tasks.

Obviously you may need to mix and match your various HR requirements, but on the most basic level it’s all about taking a specific workload off your business.

Why outsource HR?

It can offer your business ROI through cost-effective time and money saving opportunities. HR outsourcing solutions offer an excellent alternative to an in-house department, or can complement your existing team to meet the daily requirements for your workforce.

However, why do companies outsource HR? It’s to ensure your human resource activities are directly managed by experts who take a large amount of administrational duties off your hands.

HR services for small businesses can take away the control you have of those functions, but if you turn to a reputable service for guaranteed ROI you can reap some impressive rewards.

Here are some of the main benefits of HR outsourcing:

  • Access to expert HR professional if it isn’t viable to hire professionals.
  • Cost reductions due to not needing to hire a full HR department.
  • A reduction in risk—rely on industry experts to manage your activities for your business.
  • Better data management, especially across HR metrics that determine the effectiveness of your initiatives.
  • Greater efficiency in your organisation due to effective workload management with your service provider.
  • Improvements to the HR software technology managing your company’s data.

Human resource consulting firms will endeavour to cover outsourcing HR functions that suit your business needs.

As you should remember here that your business will have unique requirements to meet.

Don’t presume it’s a case at looking at your industry—or a competitor—and presuming it’ll be a case of matching what others do.

You should consider your resources and work out the best route to take.

The budget you’ll need for the services

But how much does it cost to outsource human resources? It depends on your business requirements, but you’ll often find it far more cost-effective than hiring a HR department for your business.

With BrightHR, we offer three packages that start from as little as £3 per employee every month. Our three options are:

  1. Core.
  2. Complete.
  3. Complete Care+.

Each offers an increasingly comprehensive range of HR assistance, with industry standard features such as:

We’re one of the top HR consulting firms in the UK. So these features will make your life easier as they automate many essential procedures and provide real-time updates.  

Alternatives to HR outsourcing

If you decide the option isn’t in your business’ best interests, there are still other possibilities you can consider.

You can also use the upcoming suggestions alongside your outsourcing to cover additional requirements. Here are a few substitutes you could try:

  • Shared services: This is about the internal deliver of HR across your business. It offers routine administration and extra services. In its focused form, it helps to provide flexibility.
  • Offshoring: You can consider this the action of outsourcing your requirements to a third-party overseas. Or moving your activities abroad.
  • Employee self-servicing (ESS): Also available as manager self-servicing (MSS), it’s where a comprehensive HR information system it setup. That then helps your employees (as in, the non-HR ones) to visit a portal or intranet to update personal details and other essential information.
  • Consultancy services: Hiring external consultants can help with the implementation of new HR processes. It’s a case of specialists establishing a new procedure, then leaving your business as your team manages it from there.

Again, you can use these to complement your existing HR outsourcing (or in-house department) as it can add an extra layer to your human resources processes.

Need our help?

If you’re looking for the right HR assistance for your business, get in touch and we can provide you with a free demo—or an introduction to our complete package: 0800 783 2806.

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