The benefits of outsourcing HR services are numerous. Here are some of them: Employee counseling, Mental health benefits, and cost savings. You may also be surprised to learn that the service is usually a part of the company’s core business. So, why should you consider outsourcing your HR needs? First, when you look at human resources outsourcing, consider these benefits before making your decision. Then, weigh your options carefully and decide if outsourcing is the right choice for your business.
Human resource outsourcing is contracting out certain aspects of the company’s human resources to an outside firm. While this method is often used to reduce the cost of a task, there are several benefits to outsourcing HR functions. For example, companies can focus on more strategic and creative business functions, such as facilitating change, instead of the transactional costs associated with employee counseling. Moreover, the flexibility and responsiveness of external firms make it an attractive option for companies looking to lower their overall costs and improve their services.
However, some HR outsourcing firms are larger and more stable so the cost may be high. In addition, they may have too much bureaucracy, which can cause you to incur unnecessary expenses. Also, their services may not be customized to your company’s needs. For example, you may not get the attention and response you need from a human resource outsourcing firm if it lacks adequate training or experience. Therefore, you should consider outsourcing the human resources functions to a larger company.
Outsourcing HR to a service provider can save your company money without sacrificing quality. HR-related costs are derived mainly from salaries and benefits for HR positions and administrative and operational costs. According to the Outsourcing Institute, companies that outsource HR and payroll services save an average of nine percent of their total costs. The benefits of outsourcing human resources and payroll services are apparent. But why would you consider outsourcing these functions to a service provider?
The average salary of a human resources manager is $75,000 per year, and a small business may pay several hundred thousand dollars for an HR department. Outsourcing HR jobs may allow you to save on these costs, and the PEO may be able to negotiate better rates with benefits providers on your behalf. Besides cutting the costs of hiring employees, PEOs also help small businesses in other ways. For example, outsourcing your HR functions may even allow you to save on your company’s benefit insurance.
Mental Health Benefits
Outsourcing has several mental health benefits. Employee counseling and other mental health services are often offered through employee assistance programs. These programs can be managed by third-party HR teams and promote employee attendance, productivity, and morale. Outsourcing helps lower costs and free up human resources to focus on other business areas. Mental health professionals are also often available to provide on-call counseling for employees. Mental health professionals also offer a range of counseling services, including psychotherapy.
In the wake of the COVID-19 pandemic, HR professionals have taken up the responsibility of providing mental health and wellness services. In addition, HR professionals continue to improve these offerings to meet the changing needs of their employees. For example, some companies have telepsychiatry options or apps for managing mental well-being. If you are an HR professional, you should review the company’s health benefits package to determine if mental health services are included. You should also ensure that your health plan covers mental health services, including prescription drug coverage.
Service Level Agreement
Various aspects should be considered when preparing a service level agreement for outsourcing human resources. The service level agreement is not limited to one area of the company; it can also include multiple levels of services. For example, one department of the company may need a higher service level than another, and the service provider would need to be flexible with its human resources and tariff. The service level agreement would also include a process for dispute resolution and measurement standards. It would also contain an indemnification clause to protect the client in any third-party dispute.
The process of writing a service level agreement should involve the hiring manager. By doing this, the hiring manager can begin a good working relationship with the recruiting agency and avoid any adverse reaction. In addition, the SLA should have a purpose, and the hiring manager should know exactly what they need from the recruiting agency. Finally, a service level agreement should also outline how the company will measure the results. Once these things are in place, it’s time to start drafting the agreement.