Outsourcing Human Resources Administration
Retaining top employees and attracting qualified new ones is critical to any organization. However, seeing employees as a too easily renewable resource can mean the loss of top employees and a shortage of qualified replacements.
People are the most valuable resource of any organization, yet they are also, most often, the single largest expenditure. Consequently, employees represent the greatest potential for both gains and losses to an organization. Securing the most qualified workforce and keeping them motivated requires a planned approach to Human Resources administration. As such, more and more organizations are viewing the management of their “human capital” as a strategic priority.
The challenge and opportunity for organizations is to have policies and procedures that support retaining the best employees and recruiting new ones. Having a dedicated and professional HR function within the organization makes this task much easier. However, for many small and medium sized organizations, costs and employee numbers do not justify the expense of developing internal HR expertise. Instead, Executive Directors and Business Managers are often forced to fill this role. So, when issues arise — for example an employee hire, termination or policy compliance issue — they often lack the time and skills required to address such issues appropriately.
Having access to a HR professional can make the difference between a costly error and a positive and productive work environment. An outsourced HR function can be an effective alternative to “do it yourself” HR, or to hiring a full-time, internal HR professional. Choosing the right outsourcing option depends on an organization’s size and the nature of the day-to-day HR requirements.
In broad terms there are three options: “pay-as-you-go” time-based services, monthly retainer and full service contract. The latter two generally require a commitment of some period of time, usually a year. However, with a larger time commitment come lower hourly fees.
Regardless of the model there are a number of common benefits to outsourcing the HR function. These include:
- Lesser expense than with hiring (which includes Employee Benefits, CPP, and EI)
- Lower hourly cost over paying for services on an “as needed” basis
- Greater ease for an organization to receive a full complement of HR services, set work priorities and manage HR needs within a fixed budget
- More available time for Executive Directors and Business Managers to focus on their core business functions
- Reduction in the risk of costly mistakes, such as when hiring or terminating employees, or implementing employment standards within the workplace
- Raising of Leaders’ and Managers’ competence and accountability through access to quality HR advice
The most successful HR outsourcing relationships start from the premise that the Human Resource Management function is more than just an overhead expense. If managed well it contributes directly to the success of the organization. Whether increasing performance and productivity, reducing high staff turnover, or developing policies to reduce benefit claims— each contributes to bottom line results. When viewed in this light, outsourced HR can be seen as a valuable partner and contributor to an organization’s success.
Getting the most from Outsourcing
Begin by clearly defining requirements and expectations, such as:
- Clarifying primary and secondary HR requirements— focus on priorities first
- Identifying the outcomes to be achieved over the life of the contract— accountability leads to results
- Determining the amount of time required to address ongoing needs— time equals money
- Deciding on the resources, if any, that will be required— know who provides what
- Identifying what services are to be covered and those that are additional— avoid hidden cost
- Ensuring a dedicated consultant is assigned to the service— consistency leads to efficiency
Through our collaborative approaches, innovative HR products and customized advisory solutions we impact four leadership priorities: managing risk, driving productivity, strengthening talent capabilities and supporting your bottom line. Let’s connect to find out how ASSOCIUM Consultants can help your organization.