The pressure HR is receiving from the top down is increasing as business leaders are beginning to see just how much value HR brings to an organization. This recognition from business leaders happened as a result of a paradigm shift in HR. Traditionally, HR is focused on compliance, payroll, and benefits administration. Now, HR is becoming more invested in people operations, or rather data-driven decisions that “take care” of an organization’s talent. If done right, this can lead to higher engagement rates and lower turnover.
Despite this shift, traditional HR responsibilities still need attention. Non-strategic task such as maintaining records, researching new labor laws, resolving employee concerns, and much more cannot be ignored. So while business managers expect HR to be more strategic, employees are still dependent on HR to fulfill their basic day-to-day needs. Thus HR is sandwiched between the demands of employers and employees.
Time and resources spent on non-strategic matters
CFO.com explored the amount of time HR spends on non-strategic matters. They report that the average HR leader spends about 56.5 percent of their workday doing things such as maintaining records, auditing, and providing human resources services. If you do the math, based on a 40-hour week, roughly 22 of those hours are spent on activities that don’t provide strategic value.
Caught between a rock and a hard place
Some might assume that HR should simply devote more hours toward developing HR systems, processes, and other innovative solutions to improve people operations. However, the best-planned schedule can easily take a backseat when an employee has a problem with their health coverage that takes hours to resolve. Issues like this, and many others slowly eat away at the HR professional’s day.
There is a better way
With outsourcing, HR can avoid the balancing act of giving 100% attention to their employees needs and the strategic goals of the company. “Outsourcing has become increasingly important as HR professionals seek ways to reduce time and resources spent on transactions and administration, so they can concentrate on more strategic activities,” says the Society for Human Resources Management (SHRM). “This reduction in time and resources also translates to savings for the business.”
Benefits of outsourcing HR administration
The greatest advantage that HR can have with HR outsourcing is choosing which functions to outsource. Turning over basic tasks, such as researching insurance claim issues or missing benefit cards, while internal HR retains the important strategic matters like talent management and recruiting can be a win-win.
Regardless of what functions are kept in-house or outsourced, HR can expect the following benefits:
A greater ROI in HR: That 22 hours spent on non-strategic matters can be devoted fully to driving growth. With more time being spent on activities that boost employee engagement and retain top talent, HR will be able to show how its efforts are directly impacting the bottom line, and a higher ROI will in turn lead organizations to rely more on their HR departments for strategic decisions.
Additional Support: Two heads are better than one, and that’s the case with HR. The amount of labor laws, company policies, and other information an HR professional needs to stay on top of, may be too much for one person to manage. Having access to additional support can merge the knowledge of more than one individual to help mitigate the risk of litigation or fines.
Quick Resolution to Concerns: A proper HR outsourcing partner is devoted to one thing: providing you with the best customer service possible. That means rapid responses to help speed up HR functions because whoever is on the other end of an email or phone call is devoted to assisting you and your employees.
Improved Employee Engagement: With fewer burdens on its plate, HR can devote its time towards improving employee engagement, while the HR outsourcing partner will ensure all employee concerns and questions don’t get caught under a pile of tasks.
Outsourcing allows HR to focus on strategic initiatives that directly affect a company’s bottom line while becoming a valuable partner to the C-Suite. As data-driven people operation departments become the norm, outsourcing some HR functions will become a must in order for HR professionals to operate to their fullest potential.
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