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The Human Resources Outsourcing Checklist

by: Sarah Joson

Thursday, October 17, 2013 |

Organizations are outsourcing more and more processes, including human resources functions which are either outsourced as a whole or in segments to service providers.

A post at TheSauce.net.au shares things that human resources outsourcing (HRO) clients should focus on to have a successful operation:
1. What are your goals?
Make a list of the things that you want to change in your human resources department. This way, you could easily organize and create an effective strategy. Apart from costs, some business owners have identified that they want their HR department to be more scalable. Another reason would be talent shortage and streamlining HR processes.

Basically, the trend in the HRO market right now is to improve human resources operation, which is why clients look for credible service providers which will collaborate and grow with them.

2. What do you want to do?
You should dissect your goals further. Do you want to do something that will only affect the HR department, or do you want the change to be applied to the entire company?

It is also important to know how you are going to do it with the budget assigned to you. Will it be less expensive if you outsource one or more segments, or the entire process?

3. Are you aware of the advantages and disadvantages?
By outsourcing human resources processes, businesses are able to reduce bottlenecks in the flow of tasks and overhead costs. Most of the time, repetitive and minor tasks are farmed out to service providers.   

On the other hand, outsourcing can also affect the relationships within your organization as it can disturb the working environment and lower employee morale. A lot of executives also noted that HR needs to be personalized because it deals with employee issues.

4. Find the right outsourcing partner.
Most buyers get fixated on the price right away and although that’s a reasonable deciding factor, the culture, capabilities, and track record are equally important.

Keep in mind that a renowned company doesn’t necessarily mean great quality of work. Buyers need to do their research well to get the best value for their budget. 

5. Have contingency plans.
Sometimes, a contract cannot support and resolve all the issues that will come along. A well-crafted contract, concise documentation of roles, and escalation policies should likewise be included to eliminate risks in the long run.


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