Why Outsourced Human Resources Is Important To Your Business
Updated: Aug 10
In today’s competitive business landscape, executives are often asked to do more with less. This is to maintain sustainable growth while staying on budget. Many executives turn to HR outsourcing services when they experience skill-related and staffing problems that are too costly or time-consuming to solve internally.
Many companies, especially start-ups and small businesses, have trouble hiring and retaining a skilled and experienced HR team. Without a strong HR team in place, the HR department may not be able to provide the level of service and support necessary for the company’s growth.
Companies in need of HR support should consider outsourcing. An external provider can help fill time gaps and provide the hands-on attention needed to get tasks done well. It also frees up internal resources, allowing them to focus on company growth.
What are human resources (HR)?
Before you decide to outsource human resources, you should first learn what precisely human resources is. Human resources (HR) are the department responsible for recruiting and training staff, developing workplace policies, administering employee benefits, and motivating employees to stay with the organization.
What does the human resources department do?
Staffing - Hiring employees and negotiating their compensation packages.
Workplace policies - Establish workplace policies including dress code, vacation time, discipline policies, ethics, and internet usage as needed.
Compensation benefits - Develop and manage compensation benefits including wages, sick leave, vacation, stock options, bonuses, retirement plans, and health plans.
Training and development - Provide staff training, including job skills training and team building.
Performance monitoring - Monitor individual employee and departmental performance.
Company culture - Promote a healthy culture by addressing those issues with job satisfaction, workplace atmosphere and office matters.
Why outsources HR?
Organizations choose to outsource their HR for many different reasons- some of these include:
Some companies only employ essential staff. They outsource all the administrative functions, like accounting, IT, and HR.
They need someone who has expertise in HR.
The company’s HR department has experienced huge turnover and doesn’t have the time or resources to create an internal HR department that can manage the needs of the employees.
They can no longer afford to have full-time HR staff.
But one of the main reason organizations hire HR outsourcing services is because they need to comply with employment laws and regulations. The laws can vary from country to country, which can make it difficult for organizations with employees all over the world.
Outsourcing HR services can reduce risks of non-compliance and other human resource-related risks. Some directors have even claimed that as soon as they began outsourcing their HR department to a third party, they started to sleep better knowing their company is following all the employment-related requirements.
List of human resource tasks that can be outsourced
Every employee you hire requires a fair amount of paperwork. From onboarding to employee data updates to running an occasional employee investigation, an outsourced HR company will cover the administrative tasks associated with your workforce.
Finding the right people to fill open positions can be difficult. However, hiring an outsourced HR company can be a good way of tracking down talent and finding the person that is the best fit.
Managing employees is important because if you can’t meet your goals, you won’t be able to meet theirs. If you’re running a small business and balancing multiple functions, it can be difficult to keep track of all your employees and ensure they are meeting their goals. An outsourced HR company can help with training, performance reviews, and keeping everyone motivated.
Compensation & Benefits
Paying your employees fairly is the first step in reducing turnover. A human resource outsourced company can help you determine what’s fair and competitive, as well as offer benefits comparable to others in the industry.
One of the surest ways to lose a workforce is not paying them on time and in full. Maintaining payroll can be complicated, with withholding taxes, salaries versus hourly wages, and many other things. This is another HR function where you can outsource the work to experts who know how to get the job done with reliable software.
Employees that are happy stay with the company for long periods of time and are more productive. But to get them this way, it’s important for them to feel like they’re an integral part of the organization. To get a true sense of what makes your company culture great, and what needs improvement, outsourcing employee engagement is key.
It’s rare for a company to keep the same employees for their entire lifetime. As an employer, you want to look for ways to grow the skills of your employees and provide the greatest benefits from your relationship with them. A strong employee lifecycle is mutually beneficial, and experts at an HR company can help you create a strong structure for yours.
Top HRMS software in Singapore
QuickHR is a cloud-based talent management system for all SMEs and MNCs who need HR automation. An award-winning HRMS loaded with features to help HR managers. These include payroll, leave, claim, workforce management, recruitment, appraisals & analytics.
Swingvy is an all-in-one HR, payroll and benefits cloud-based platform that catered to SMEs, enabling them to engage and manage their employees.
JustLogin is a premier Software-as-a-Service provider headquartered in Singapore. They offer a suite of HR and office collaborative applications for the global business community.
When should you outsource HR services?
Lack of experience with employment law from your human resources department is only one reason you should look into outsourcing HR tasks. From simply needing to improve your company’s process to more serious legal and compliance concerns, here are some example situations where you should consider HR outsourcing:
A lack of HR professionals overall
Inefficient performance management systems
Training is required in areas such as motivating employees, appropriate recruiting methods, and providing effective employee feedback
A company’s major HR functions are often not managed effectively or there are no written guidelines and procedures
An outdated employee handbook
High benefits cost
Questions about the competitiveness of employee wages and/or benefits
Concerns about compliance with employment laws and regulations
Issues with hiring or retaining employees
Employee complaints rise
Concerns for HR managers during the annual financial audit process
General compliance issues, including inadequate workers compensation insurance, misclassification of employees, and fines imposed for non-compliance of hours and wage laws
What are the benefits of using an HR outsourcing company?
The first, and arguably most obvious, advantage of outsourcing HR is that it allows you to keep up with trends and changing laws. But as your company increases in size and HR needs, there are many more advantages to HR outsourcing, such as:
1. Save your precious time
One of the most important benefits of outsourcing HR services is that you can save time. Whether it’s from filling out long forms, recruiting employees, or conducting other administrative tasks, you can spend less time on HR-related things.
2. Spend less and save more
Even if you manage to lower your HR expenses, the total cost of HR functions can get high. For startups, it is unfair and risky to depend on a single employee to handle recruitment and payroll, benefits, and other HR work. You need a team that specializes in different aspects and can help you with everything from recruitment to payroll. That will make these costs higher.
By outsourcing HR, you can save both time and money. Having to manage your own HR department can be both a burden and expensive due to the costs of salary and benefits. Plus, as more employees are added, the space needed for those employees increases. The benefit of outsourcing is that it frees up your time, works around the clock, and is less expensive by removing the need for salary and benefits.
HR isn’t a revenue-generating department, and it takes up a lot of resources in the business. As an advantage of outsourcing your HR functions, you may be able to save on some costs. For example:
Payroll - One advantage of HR outsourcing is that you save on payroll costs. That includes managing all the records, making pay slips, doing tax deductions and other things. If not, you’ll need a team to maintain an internal HR system, which would probably cost you double that of outsourcing.
Recruitment & Hiring - You may not have had to deal with recruitment and hiring if you outsource your HR function. A common HR process that is both time-consuming and expensive is recruitment. However, outsourcing this function can significantly reduce your HR costs.
Salary & Training - The more employees you have, the more time and money you spend training them. You also have to take into account legal costs, insurance premiums, and monthly benefits when you hire an HR professional. When all of these are factored in, you’ll be grateful for the benefits of outsourcing your HR department.
3. Risk Management Become Simple
The next benefit of outsourcing HR functions is minimizing risk. Keeping up with changing regulations can be a daunting task. Especially for small businesses, adhering to many of guidelines for operating as a business becomes quite complicated. Therefore, failure to respond to changes may result in non-compliance.
A major benefit of HR outsourcing is that it simplifies the process of complying with laws and regulations. You can easily rely on us to check your compliances such as auditing, hiring, insurance, employee benefits, and many others.
Why choose Acc Pro (Singapore)?
HR departments today don’t need to settle for in-house employees who are inexperienced or refrain from hiring anyone at all, because they can’t take on more responsibility due to lack of time and resources. This is where our HR outsourcing service can help. We provide the flexibility, experts, and skills that you need so you can focus on your day-to-day tasks.
Acc Pro (Singapore) saves you time and money. We handle all the tasks in your HR department such as leave encashment and no-pay-leave processing, prepare payroll reports for approval, claim reimbursement processing, generate and review of IR8A (inclusive of taxable employee benefits), and others.
In short, we’re a company committed to providing our clients with reliable and trustworthy employment solutions, processing payroll, and administering benefits that complies with legal standards.
Productivity Solutions Grant (PSG) and SkillsFuture Enterprise Credit (SFEC) with HR Shared Services
The Productivity Solutions Grant (PSG) supports companies keen on adopting IT solutions and equipment to enhance business processes. Get up to 70% funding support when you choose Acc Pro (Singapore). Our HR Shared Services Package comprises of payroll, leave, claims, appraisal, time and attendance and we integrate services to QuickBooks Online or Xero. Click here to find out more details on the eligible solutions.
Also, SkillsFuture Enterprise Credit (SFEC) encourages employers to invest in the enterprise transformation and capabilities of their employees. Eligible employers will receive a one-off S$10,000 credit to cover up to 90% of out-of-pocket expenses on qualifying costs for supportable initiatives, over and above the support levels of existing schemes.
As a pre-approved vendor under Productivity Solutions Grant (PSG) and HR Outsourcing company, we offer a variety of services including HR compliance, payroll, attendance and leave management, year-end computation and submission of IR8A, processing of approved expense, benefit and medical claims, and so on. Contact us today to speak with our HR consultant.