It takes time to recruit and develop strong employees. In periods of rapid growth, it is very difficult to do well. Employee outsourcing is a solution that works well for some organizations, especially now that talent is at a premium.
The stress of the financial crisis is mostly over. According to the ADP report, Driving HR Strategy for a Future-Ready Business, approximately 10,000 baby boomers retire every day, and there aren't enough people entering the workforce to replace them. The trend toward flat organizational structure and the necessary retrenchment of the recession has thinned middle management ranks. That can make the process of identifying, recruiting, onboarding and developing new workers more difficult than in the past.
There's a solution, though — outsourcing. Done right, outsourcing HR services can allow staff to focus on strategy rather than administration. This can be especially important as the market for great employees becomes more competitive.
Employee Outsourcing and Technology
The right technology can better integrate HR into the organization while simplifying the administrative component of the role. HR is closely aligned with finance since finance leaders should be aware of how money flows to different departments and roles. Technology can also help with data collection and analysis to inform such business decisions as investing in training or changing personnel deployments.
Some businesses still handle HR transactions through paper forms or phone calls to the HR office, even though technology makes it possible for people to change insurance plans, update beneficiaries and file tax withholding requests right from their personal device. An outsourced HR solution may include a secure, compliant website or app for HR self-service even in smaller organizations. This saves the employee time and the organization money.
Harnessing the Expertise of HR
Leaving administrative stuff to computers allows the HR team members to think strategically. They can work on the retention and development programs that matter to your organization's strategy. They can also work on the culture of the firm, helping to establish and reinforce norms to support compliance and growth.
The HR strategy helps determine who the next generation of leaders at your organization will be and what capabilities those people will have. It determines where recruiting will take place and what roles are priorities. These responsibilities are important to the future of your firm. Tax withholding adjustments have to be done correctly, of course, but they do not have the same long-term strategic importance as talent acquisition.
Outsourcing and the Changing Firm
Outsourcing has another advantage — it can keep the HR staff stable. Otherwise, the department can often experience a boom-and-bust cycle, with employees being added to handle the paperwork when the firm is expanding, then letting them go as the headcount elsewhere in the organization stabilizes. The switch from old tactics to a digital strategy eventually leads to an HR staff that is committed to the firm and its mission, creating a tangible and profitable long-term competitive advantage.
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