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A business’s greatest asset is no other than its employees. Companies invest in talent not only to keep operations running and achieve organizational goals, but also to serve as representatives to customers, clients, and would-be employees. While employees are mostly responsible for their own learning, human resources (HR) management also plays a vital role in their development.
HR management is more than managing employees; it’s tapping into their skills, knowledge, experience, and potential to drive success in the workplace and in their individual careers. However, technological advancement in HR, evolving regulations, and turnover are troubling HR managers more than ever.
The good news? Outsourcing HR management gets HR managers back on track and elevates their HR game in ways that make organizational and employee success more attainable — that is, without straining your current workforce.
If the idea of outsourcing sounds good to you, this comprehensive article will teach you everything about outsourcing in human resource management.
What Is Human Resources Management?
From the name alone, HR management is a function that involves managing HR staff and other employees in the company. This includes recruitment, performance management, and employee engagement. It is also integral to workplace safety, compliance with employment laws, and fulfillment of organizational and individual employee goals.
What Are the Responsibilities of a Human Resources Manager?
HR managers are the leaders of the HR department. From recruitment to compliance, they wear multiple hats to keep the department and the organization running smoothly. Let’s tackle each of their responsibilities below:
Recruitment and Talent Management
Human resources managers are responsible for writing and posting job descriptions as well as sourcing, screening, interviewing, and onboarding employees into the company. They also orient employees on workplace policies and provide support to new hires.
Performance Evaluation
These professionals liaise with team leaders, supervisors, or project managers to conduct performance reviews for potential salary increases and promotions within the department.
Employee Development
HR managers monitor employees’ training needs and create appropriate professional development programs.
Compensation and Benefits Administration and Management
Human resources managers create and oversee compensation and benefits packages for employees. These HR professionals factor in workplace needs in designing these packages to ensure that employees are well-compensated and healthy, thereby improving retention.
Workplace Discipline
HR managers enforce company rules and regulations and impose sanctions — such as a suspension or a written warning — on employees to correct behavior, improve performance and productivity, and promote workplace safety. Depending on the severity of the violation, HR managers can terminate employees.
Conflict Resolution
Leveraging their interpersonal, creative, and analytical thinking skills, they mediate and resolve conflicts between employees to promote well-being and avoid resentment.
Compliance
Human resources managers keep abreast of changes in workplace safety standards and employment laws to ensure the organization maintains regulatory compliance and meets industry standards.
3 Benefits of Outsourcing In Human Resource Management
This section explores some of the benefits of outsourcing in human resource management.
1. You Can Improve In-House Professional Development Programs
The Issue
Whether your employees work in the finance, HR, or marketing department, professional development is key to making themselves relevant, competitive, and future-ready in the workforce of tomorrow. When companies prioritize professional development, retention is greatly enhanced.
Gallup and Workhuman surveyed full-time and part-time 4,439 US adult employees. When asked if their company pushed them to upskill, the participants — who were 18 years old and above — answered “strongly agree.” Due to this encouragement, the report found that these employees have a 47% lower chance of seeking new job opportunities.
However, professional development involves resources. From developing training programs to finding an appropriate mentor or training venue, this initiative can leave HR departments stretched too thin, thus deprioritizing core business activities. Additionally, training programs should be tailored and engaging for all employees; otherwise, they won’t fully invest in their development.
How Outsourcing HR Management Achieves This Benefit
An HR outsourcing provider can augment your team with HR managers and other HR experts who can develop training programs that are tailored to address skill gaps, encourage leadership, and meet workforce needs.
With the help of advanced employee training software, staff members have a clearer picture of their career trajectory, so the skills they learn suit their current position or prepare them for a future role in the organization. This encourages self-learning while also providing HR managers with data on the effectiveness and engagement of the training courses.
2. Your Company Remains Compliant With Employment Laws and Workplace Safety Standards
The Issue
If there’s something that HR departments should never neglect, it’s compliance. Compliance makes the difference between a lawful organization and costly lawsuits. As the primary drivers of compliance, HR staff familiarize themselves with employment laws, workplace standards, and data privacy regulations, so the company fulfills its legal duties and avoids penalties.
With the amount of workload that HR managers face, there’s a tendency for compliance to be relegated to the back seat. Workplace bias, discrimination, and harassment are just a few of the compliance challenges HR managers face. Let’s also not forget that compliance issues can originate from payroll processing errors and a lack of qualified legal guidance.
How Outsourcing HR Management Achieves This Benefit
HR outsourcing companies employ HR managers who are knowledgeable of employment laws and workplace standards at all levels of government. They help your business navigate the complexities of legal frameworks, ensuring your business remains fully compliant with local (overseas) laws and standards.
Outsourced HR managers can also review workplace policies and conduct compliance training, so your workplace becomes a positive environment for all employees — regardless of their gender, age, or race.
3. You Can Reduce Labor Costs
The Issue
Local labor is more expensive, with the average cost of hiring sitting at $4,683 USD per hire. Obviously, recruiting and hiring costs differ between roles, companies, and industries. According to the US Bureau of Labor Statistics, HR managers earn an annual median salary of $140,030 USD.
As labor costs rise due to inflation, businesses turn to cost-effective options, such as contract workers and offshore outsourcing services, to offset costs while still benefiting from the specialized expertise of these contract and outsourced professionals.
How Outsourcing HR Management Achieves This Benefit
Outsourcing to the Philippines drastically slashes your labor and overhead expenses, thanks to its lower wages and cost of living. In fact, on average, Filipino HR managers earn $10,482.54 USD to $12,579.05 USD a year.
By collaborating with an HR outsourcing provider, you can work with cost-effective HR managers who possess the same or higher caliber as local HR managers. Because outsourcing HR tasks puts less strain on your budget, you can better plan for future HR and business investments.
4 Challenges of Outsourcing In Human Resource Management
While outsourced HR services carry plenty of advantages to your business, be prepared to encounter these challenges when outsourcing in human resource management:
1. Overspending On Outsourcing
HR outsourcing may be cost-effective, but it’s easy to fall prey to overspending and compromising your company’s financial health if you don’t track your expenses. HR outsourcing costs encompass everything from labor to compliance fees. Hidden fees, such as currency exchange rates and technology upgrades, can likewise affect your budget.
2. Working With An HR Outsourcing Provider That Doesn’t Understand Your Business Needs
No outsourcing company is perfect. However, an HR outsourcing company that doesn’t understand the nuances and peculiarities of your workplace culture can lead to unmet needs and expectations. Hence, you might end up being dissatisfied with the provider’s quality of HR services.
3. Ensuring Data Security and Privacy
Data security and privacy are critical to HR outsourcing. Outsourcing does carry a degree of risk, as you’ll be allowing the HR outsourcing provider to process and store your data. If the outsourcing company’s security infrastructure is weak and employee data gets leaked, you’ll be in for a lot of trouble with your internal resources and, of course, the law.
4. Dealing With Time Zone Differences
In HR outsourcing, interactions take place virtually. Unfortunately, time zone differences can mean delayed responses and lost productivity. Because time is of the essence when outsourcing in human resource management, your HR outsourcing firm can adjust to your business hours for real-time HR support.
4 Best Practices In Outsourcing HR Management
This section resolves the challenges discussed in the previous section. Follow these best practices to reap the benefits of HR management outsourcing:
1. Financially Prepare Your Business for HR Management Outsourcing
It’s all about creating a budget and being aware of the costs of human resources outsourcing. Do extensive research on the Philippines’ cost of living and average salaries for HR managers. Consider also the project complexity, headcount, software, and your preferred experience level of HR managers. All these factors can influence your monthly total bill.
Additionally, don’t forget to ask for the breakdown of costs. The right HR outsourcing provider is transparent and will be happy to dissect the expenses of their outsourcing services.
While outsourcing expenses vary from provider to provider, anticipating all the possible costs can better financially prepare your business for expected and unexpected expenses. This way, you can enjoy the fruits of your provider’s service offerings and achieve a high outsourcing ROI.
2. Choose An Experienced HR Outsourcing Provider
The provider you’ll work with can make or break your company’s HR management operations. Well-experienced HR outsourcing companies possess deep knowledge of your industry.
Thanks to this knowledge, they can understand industry nuances and requirements. Because these providers have worked with clients, they can tailor their outsourced HR management services to your business needs.
In line with this, choose an outsourcing company experienced in outsourced HR management. Likewise, it would be better if the external provider has ample experience in providing HR management outsourcing services to clients operating in your industry. This minimizes the risk of unmet expectations and dissatisfaction with the outsourcing company.
3. Protect Your Data At All Costs
Never, ever skip cybersecurity. This starts with vetting your HR outsourcing partner’s cybersecurity capabilities.
Probe into the provider’s IT infrastructure, data security practices, remote work policies, fraud detection measures, and risk management strategies. Ask about their background-checking processes and how they hire HR managers with integrity. Most importantly, check if the company is certified by the International Organization for Standardization (ISO).
When outsourcing in HR management, you’ll want to err on the safe side since your employees’ data is at stake. One data breach or insider threat can expose your data to hackers and cyber criminals.
If you’ve already started working with an HR outsourcing company, don’t make the mistake of being too complacent with your data security. Here are three tips:
- Limit employee data access to a select few outsourced HR managers.
- Help your HR outsourcing partner monitor for suspicious activity.
- Formulate a data recovery strategy with your external provider.
4. Communicate With Your Offshore HR Managers
When outsourcing in human resource management, the company has already prepared offshore HR managers who have agreed to work on your schedule. Building trust and forming a strong relationship with your offshore HR management team boils down to communication. Without proper communication, the partnership crumbles — and that’s something you wouldn’t want to happen.
Here are five tips for effective communication:
- Learn the culture and communication style of Filipino workers.
- Conduct weekly meetings to keep offshore HR managers in alignment on goals and expectations.
- Provide clear instructions to minimize lapses and errors.
- Ask follow-up questions whenever possible to ensure clarity.
- Actively listen to feedback, suggestions, and insights from outsourced HR managers.
Get Started With Outsourcing Human Resource Management KDCI Outsourcing
At KDCI Outsourcing, we understand the vital role of HR management in driving organizational success. Our offshore HR managers are equipped with all the right skills — from technical to soft skills — to handle your HR department and liaise with your internal team.
By integrating AI, automation, and modern HR technologies into your workflow, we can enhance your HR operations, improve operational efficiency, reduce errors, usher in innovation, and free your internal resources from boring administrative tasks.
Let KDCI Outsourcing oversee your HR department. Hire an HR manager or build a full HR team with us. Let’s get talking today!
