It’s a common believe that HR should continually improve, especially with regards to efficiency in the administration and services delivered. HR outsourcing is one way that this can be achieved as it would balance increased demands placed upon HR functions to deliver cost savings with increased results.
Within this, consideration is required as to any downsides as well as any benefits gained from outsourcing, either part or all of the HR services. To decide whether or not this approach suits the organisation. Where such arrangements are adopted, it’s also important to have a clear strategy in place for managing the transition from a part or full in-house provision to a part or full outsourced provision. In doing this HR can ensure that any provision fully supports all areas of the organisation
So how do you select a provider for HR outsourcing
Certain actions and decisions must be taken when selecting a suitable HR outsourcing provider – many of which will be similar to those undertaken when entering into any business arrangement.
Understanding your existing HR service, the actual costs, its effectiveness and level of service are key. This will give useful information when comparing provider offerings and quotes for a part or full HR service. Future requirements of the organisation should also be considered.
Establishing a shortlist of preferred suppliers
Communicate with other organisations with which the outsourcing providers currently have contracts, to establish how satisfied they are with the providers.
Consideration should be given to whether the potential provider will fit your culture and will have an understanding of your business. In particular identify the ‘actual’ person who will be the key HR provider and confirm if that individual can fulfil the required contract length. Ensure the requirements are clearly defined for your potential HR service provider.
Managing the transition to HR outsourcing
When managing the transition from in-house to an outsourced HR provider many considerations will be similar to those required when managing any organisational change. An outsourcing arrangement will often include changes to existing HR processes and will need to be communicated to all levels of the organisation. Its important to make sure that sufficient HR cover remains internally to manage the transitional period as well as providing ongoing support.
It is possible that a number of changes may be required to existing roles. It’s also important to recognise that these processes might take time to introduce. During this period communication to staff about the whole process is important not matter what the size of your organisation is.
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