Manmeet Singh comes with over two decades of experience in business management and operations across IT/ITES, Staffing, and Human Resources industries. He is presently working as a Deputy CEO at V5 Global, A Unit of FirstMeridian Business Services. Manmeet is passionate about preparing the workforce of tomorrow and connecting people to meaningful work. He is also a Governing Council member of the NASSCOM IT- ITes Sector Skill Council representing the Staffing Industry. Manmeet holds a Computer Science Engineering Degree with a PGD in SCMM and has participated in executive programs at Harvard Business School.
Human resource management is a critical yet complicated role for every business. While big companies can afford to bring an efficient HR department, most small companies may rely on outsourcing this critical business to HR consultancies or external partners. The majority of the companies that outsource HR functions do so by joining a professional employer organisation or Professional Employee Organisation.
Outsourcing corporate business functions has been a common technique for several decades now. Businesses outsource services such as IT, accounting, and even human resources to focus on developing new strategies, using specialised skills, and reducing costs and operational timings. Small firms in today’s economic environment should consider the benefits of outsourcing human resources. Here are a few advantages of outsourcing:
Time-saving – Outsourcing lends an opportunity to focus on the company’s productivity rather than spending time on primary administrative duties. The most significant advantage of HR outsourcing is the ability to save time. Outsourcing allows companies to save considerable time in HR operations like recruiting, employee remuneration, exit formalities, and other administrative tasks. Companies can devote their time to more strategic business activities.
Avoids inconsistency – Employee management takes a specific level of expertise and skill set. However, some small companies do not have the skills, resources, or training to make a provision for the same. As a result, there are chances of payroll mistakes, mishandling of employee documentation, lack of effective staff management procedures in place. These gaps in expertise pose a risk to the firm and cost time and money, but they also require business leaders to spend more time than needed on these duties. Outsourcing HR services allows a firm to focus on creating new business goals, building a strategic plan, and marketing, which may result in better efficiency and productivity.
Improves Compliance – Most small companies struggle to keep up with new rules and regulations dealing with the pandemic, labour and employment laws, insurance claims handling, and many other concerns. Non-compliance with rules and regulations can have substantial financial implications. Outsourcing HR responsibilities to a trusted source can assist business owners in recognizing and adhering to such laws and regulations.
Provides added advantage – HR outsourcing benefits small and medium-sized firms more. While start-ups and small firms have fewer resources than big corporations, outsourcing HR may help them expand. Outsourcing HR operations can help assist in strategizing and improving employee benefit plans. The prospects for advancement become unrivalled through increasing staff communication and creating unique employee benefits, among other things.
Risk Management – A significant advantage of HR outsourcing is that it makes complying with laws and regulations easier. A PEO can readily maintain track of the compliances like audits, recruiting, insurance, employee benefits, and various other factors.
Human resources (HR) is crucial to a company’s success. Creating an HR department within the firm and growing it as the company expands might burden the resources. On the contrary, outsourcing is less expensive and may result in more efficient and effective human resource management. By outsourcing many activities that HR executives are in charge of, a firm can devote more time and resources to things directly related to the business’s success and prosperity.