We previously explored the popularity of outsourcing part, or all, of an organisation’s HR function within the UK. A recent survey reported that seven in ten UK companies currently outsource services to third parties and 30% plan to outsource more by 2022, some of which is as a direct result of the Covid-19 pandemic.
Whether you have an in-house HR professional or not, there may be times where you need an extra pair of hands to support your business in different HR-related tasks. Outsourcing to an HR Consultancy not only frees up your time but also frees your mind while gaining expert knowledge and insights.
Here are our 5 top tips to consider when outsourcing your HR:
1 – Align with your overarching business strategy
Here at HR Inspire, we recognise that everything an organisation does, needs to have the overarching strategy and goals in mind. Therefore, it is crucial to start here when considering outsourcing any business activities.
Outsourcing decisions can be tactical or strategic. Tactical outsourcing is centred around a practical problem that needs a solution, such as inhouse HR professionals struggling with capacity. In comparison, strategic outsourcing is aligned with long-term strategies. It is important to consider whether your outsourcing will support or hinder you in achieving wider business objectives. For example, outsourcing recruitment will develop your employer brand and gain a wider reach when seeking suitable candidates.
2 – Identify the level of support your organisation needs
Outsourcing time-consuming HR activities is an intelligent choice for increasing efficiency in the daily workflow. This allows you to dedicate your time and resources to focus on the company’s strategic tasks. So carefully identify the services you wish to outsource, ensuring that the support provided is tailored to your business needs.
Many tasks can be outsourced. According to CIPD, payroll is the most commonly outsourced HR service, with consultation on complex specialist topics following as a close second. It is important that you decipher which tasks will be most beneficial to you when outsourced and why.
3 – Find the right “fit” for your company
It is vital that your business not only partners with an organisation experienced in the areas you require support in, but one that also fits well with your culture and people. The perfect HR provider will be one that understands your business mission and objectives and can adapt to your preferred working styles. Your chosen HR partner should become an extension of your inhouse team, fostering a relationship of collaboration and trust.
We also recommend appointing a key relationship manager within your team, to be able to communicate easily and efficiently with the third-party provider and to monitor the collaboration. This relationship would start in the onboarding process and continue throughout the lifespan of your contract, with the individual providing great insight on the success of the outsourcing agreement and reporting back internally. Check out the CIPD’s suggested questions to help you find the best HR partner.
4 – Make sure the contract works for you
When outsourcing any business activities, it is vital that the supplier contract works for you and your business objectives. The contract should be detailed yet adaptable, allowing activities to flex to changing business needs. We would recommend setting fixed review periods at the very beginning of the agreement to hold each other accountable and reflect on the partnership so far, enabling you to improve this over time if needs be. You may also want to involve your employees in the outsourcing process, as they will be relying on the HR vendor to help them with different aspects of their workload. Knowing who to go to will certainly help everyone feel more confident during the process.
Most importantly, the contract or SLA should be centred around measurable objectives. Setting SMART goals will allow you to agree on actions within a fixed timeframe and ensure that performance is reviewed accurately, reflective of factual data.
5 – Don’t get complacent
It is imperative that you view HR outsourcing as an ongoing process that requires measured and rational interaction. As we’ve already mentioned, we recommend ensuring regular assessments of how well the agreement is working. Feedback should be a priority when outsourcing and this works both ways with the selected partner being able to give feedback and provide advice on where they see they could make improvements. This will only foster a collaborative and open relationship to the benefit of both parties.
Some questions to regularly ask yourself may include:
- Is the expected quality and performance being achieved and maintained?
- Are communications consistent and enabling employees’ understanding and engagement of HR initiatives and policies?
- Is the HR firm providing the training and professional development requested?
- Has your regulation compliance improved?
- Are you hiring more competitively and retaining your top talent?
If your answer is “YES” to any of the above questions, you have made the right choice in outsourcing.
At HR inspire, our team of expert HR Consultants are able to immerse themselves within the clients’ cultures and communities. We provide expert advice and solutions tailored to your business and your unique requirements. If you are considering outsourcing any aspect of your HR, why not give us a call for an informal chat?