7 Strategies to Contain Costs with HR Outsourcing

February 17, 2017 Gary Bryson

Human Resource’s value has been increasing over the years. According to Bloomberg’s analysis of HR, 70% of HR departments say they have full or substantial involvement in key business decisions. While HR is getting a seat at the table, they are also consuming a larger percentage of total operating costs.

However, just because HR is becoming a more strategic business partner, it doesn’t mean HR has to become more expensive. Finance leaders can contain the costs in HR while still allowing HR to effectively support their company’s people strategy. And, when saved resources are diverted from HR to growth areas like sales and product development, business can scale effectively and swiftly.

Here are some strategies for containing HR costs:

  • Use a single data-set solution: “Why configure a bunch of different systems,” says HR.com “when you can consolidate and save by implementing an all-in-one system.” Organizations that outsource to multiple vendors pay an average of 18% more than businesses that keep HR in-house. A single data-set solution makes financial sense.
  • Automate Processes: When you automate HR processes, like onboarding, you turn HR from a paper pusher to a strategic business partner while reducing the need to spend money on additional in-house staff.
  • Outsource HR: Outsourcing to a solution that uses people and technology can cost less than bringing in your own technology and hiring an in-house employee to manage it. 
  • Reduce Health Care Costs: Check to ensure carrier health insurance carrier bills line up with your current workforce. You may be paying health insurance on an employee you terminated months ago. Take the time to analyze different healthcare options and decide what is best for your employees and your company’s budget.
  • Review Benefits Plans: Businesses spend an average of 31% over and above an employee’s gross pay for benefits. Review your current benefits packages and see if benefits are going unused. Benefits that provide little value to employees can be changed or removed.
  • Analyze HR Metrics: Access HR metrics to determine how effective HR efforts are. If certain actions are not improving employee retention and engagement, HR may need to reevaluate processes to better execute your company’s people strategy.
  • Invest in Health and Wellness Programs: For every dollar invested in an employee wellness program, SHRM reports the estimated overall ROI is $1.50. If hiring an office coach or paying for gym memberships is too much, request that HR implement a cheap solution like starting an office walking club.

Human Resources is an important part of the success of any company, but they don’t have to be a drain on operating costs. Now, more than ever, finance professionals have the opportunity to guide HR to be a strategic business partner and reduce its operating costs. 


About the Author

Gary Bryson

Gary is the Director of Finance for Zuman. He has over two decades of experience in finance from working in a variety of positions such as financial consultant and Sr. Director of Finance Operations. Gary holds a BS in accounting from San Jose State University.

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