HR Outsourcing Is Cost Effective For SMEs

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Why getting your HR outsourcing services from the Philippines is cost effective for SMEs

To hire executives with passion for repetitive and tedious human resources tasks are often difficult to find, especially for startups and SMEs. Not to mention, it takes a lot of resources and is thus costly for this business demographic.

That is why there is a growing traction of small business owners getting HR outsourcing services from the Philippines. This is due to the fact that the country is a great place for anything outsourcing. Especially if your goal is to get quality services that are still cost-effective. 


What You Should Know About Human Resource Outsource Solution

HR outsourcing involves a lot of processes namely acquiring services and utilizing the expertise of an outsourced team to handle your company’s HR functions. This department often deals with complex and time-consuming processes and thus outsourcing some or all of its processes is often a strategic initiative for SMEs.

Two subtypes of HR outsourcing:

  1. Outsourcing provider that manages employees along with clients and provides key HR and administrative services
  2. Outsourcing provider that only provides key HR administrative services

Typical HR functions you can outsource from the PH:

  • HR consulting
  • Benefits administration
  • Time tracking
  • Insurance services
  • Performance management


The True Cost of HR Outsourcing Service Provider for SMEs

HR outsourcing serves an integral position for startups and small businesses with limited financial and human capital. Through this effective yet cost-saving strategy, your business can enjoy quality HR services without investing too much in hiring an in-house HR team.

Cost is the reason why a lot of SMEs choose to outsource. For HR outsourcing, the straightforward answer is you have to spend a cost margin that reflects on the following:

  • Size of your business
  • Number of your employees
  • Scope of HR services you want to get or as commission-based
  • Volume of information to handle
  • Deal type
  • Industry where your business belongs to as this also dictates the total cost you have to spend (e.g. different cost for IT, finance, telecommunication, manufacturing and etc)

In addition to that, there are two existing payment schemes when it comes to this type of outsourcing. These are the following:

  1. Fixed fee basis
  2. Paid per employee basis


Outsourcing HR support services You Can Get From the Philippines

As mentioned, there are different functions that an outsourcing provider can offer you. Mostly, businesses select what HR functions they outsource from the Philippines. While others choose to outsource their entire HR department. These functions are the following:

1. Compensation

This function involves payroll, job evaluation systems, salary surveys, executive compensation design, and even expatriate compensation. Outsourcing payroll and tax-related processes can help your business to meet filing deadlines and deposit requirements on time.

Aside from saving on cost, it helps you improve your customer service, utilize available tools and software, as well as allow your internal HR department to work on business-related tasks and strategies.

2. Employee Administration

This is where the outsourced HR team will do these tasks such as development, maintenance, and operation of HR information systems. This also involves employee and manager policy and process support, self-services and customer service, and management and retention of employee data and records.

3. Employee Rewards and Recognition

Recognition programs can take up a lot more time than you can imagine. A simple employee of the year often involves multiple tasks that are time-consuming. An outsourced specialist can better handle such tasks to ensure better incentives and rewards programs for your in-house employees.

They can cover areas such as productivity, sales, workplace safety, and years of service. This results in better administrative tasks in comparison with routine tasks and frees them for other necessary responsibilities.

4. Benefits Administration

Effective employee benefits management ensures high employee satisfaction. At the same time, it protects your business’ bottomline. Outsourcing this function will help you to better handle negotiated contracts, volume buying, and economies of scale. 

You can also get call center support, eligibility management and audits. As well as compliance and carrier oversight. 


Benefits of HR Outsourcing for SMEs

Getting reliable HR services from an outsourcing provider in the Philippines will give you the following business benefits.


Especially for SMEs. as you can get an HR partner armed with the necessary skills and in-depth knowledge in human resource management to do the work for you. This may include payroll, recruitment, training and many more.

This helps you focus on your core activities without sacrificing efficiency of the overall operations. 

Cost Reduction

SMEs are often focused on directing their finances in areas that contribute to the overall ROI and profit. HR experts from an outsourcing provider are dedicated to ensure smooth and streamlined human resource processes. 

Save time and money on training

Training is a must when you have employees and HR outsourcing can help you with that at a fraction of the price. Here you can get training requirements such as diversity training, sexual harassment training, and ethics training among others. 

Effective training will help you shape your employees to become competitive for their jobs. Also they can help with your business growth with proper training.

Business Growth

HR outsourcing ensures an efficient and effective overall human resource process for startups and small businesses. As they can provide the necessary expertise and support that your business may require. 

Also financial benefits of outsourcing HR functions is undeniable when it comes to accounting, IT services, and digital marketing responsibilities. 


Magellan Solutions is a Premier HR Outsourcing Service provider for SMEs

We provide the best outsourced HR team that possesses the necessary skills and knowledge to provide HR services that your business requires. We strive to provide top quality human resource services and provide you with the best practices in the industry.

Magellan Solutions commit itself in providing excellent HR services customized for the needs of startups and SMES.

Additionally, we are an ISO 27001-certified and HIPAA-compliant BPO company in the Philippines. This is our pledge to provide the best services on top of ensuring your data and information is safe with us.

Contact us today and let our Business Success Managers help you create the best HR solutions custom-fit to your needs. Fill up the form below!


Contact us today for more information.