Outsourcing HR services has become a trend among businesses. What was once known as a pure in-house function is now being performed by third service providers. In fact, 30 percent of the respondents in a 2014 Deloitte survey said that their company are outsourcing payroll time and administration services — one of the essential HR services in every business organization. Correspondingly, the said function is the most outsourced HR service because of its time consuming nature and compliance challenges.

With this growing demand, the global market for HR services outsourcing is presumed to reach US$53.9 billion by year 2020, Global Industry Analysts stated in a report.

The same report revealed that the primary reasons why enterprises outsource are to reduce costs, streamline operations, increase operational efficiency, and lower exposure to risks by stepping up compliance management.

1. Reduce costs 

   Why will you pay a higher price for an in-house staff when you can avail the same service from an outside party at a much lower price? Staffing expenses can cost businesses an arm and a leg. Their salary — including the benefits, bonuses, et cetera — can make up a huge chunk of the yearly budget. Hiring HR staff also takes time and money. Moreover, an HR department also requires additional office space and equipment. Outsourcing HR services is a cost-effective solution, particularly for small businesses, because talent, infrastructure, and equipment are readily available. It is also a good way to prevent overhead costs.

2. Streamline operations 

   Third service providers, BPO in Philippines in particular, usually have standardized systems and process used for HR services that allow faster, improved service delivery. They have advanced technology that streamlines significant functions like payroll, compliance management, and benefit administration. Through this, employees don’t have to spend too much time dealing with paperwork.

3. Increase operational efficiency 

   Outsourcing this function allows business executives and employees to focus more on their strategic activities. As mentioned above, technologies that allow a streamlined operation lowers the number of time spent on paperwork. By eliminating this tedious task, business can surely dedicate more time on improving the efficiency and effectiveness of their workforce. Additionally, an outsourced HR function can aid organizations on managing employee performance and development. They can make sure that everyone comply with company policies and procedures. It does not only minimizes the administrative responsibilities of managers, it also ensures that everything is at place.

4. Lower exposure to risks 

   Keeping up-to-date with the ever-changing  employment and labor laws is a challenge. An outsourced HR service stays abreast on different federal and state laws and implements it correctly in order to avert businesses from facing costly lawsuits brought by employees. It is a good way to ensure that none of the employees will take advantage of the organization while making sure that the former receive the compensation and treatment they deserve.

Outsourcing the type of HR service depends wholly on your needs. There’s an appropriate function for what your business demands. Among the services, which Magellan Solutions offer, are the following:

• Recruitment
• Technical recruitment
• Workforce administration
• Employee data management
• Payroll
• Talent management
• HR analytics
• HR transformation
• Expatriate administration
• Global mobility
• And many more!

Cut costs, lower risks, and improve the operation and efficiency of your business by outsourcing HR services! Contact us now more details.