The reasons for companies to outsource in the HR area are diverse. As a rule, outsourcing is primarily about the process improvement and optimisation of operations. In fact, relocating operational areas such as human resources can also reduce costs for the company.
However, it is not just the cost reduction that can represent great potential for companies, there are also advantages in other areas:
- Flexibility: You can react more appropriately to capacity bottlenecks, e.g. when hiring new employees.
- Focus on core competencies: Especially in human resources, by shifting routine activities (e.g. wages and salary statements, correspondence with authorities, etc.), those responsible can deal with more important personnel questions (does the company have and keep the right employees? Can these be targeted? developed?)
- Increased efficiency: Due to the fast pace and costs of new technologies, ever higher investments are necessary.
- Risk transfer: Due to frequent changes in the law there can be gaps in information which may result in decisions by leadership of many companies to be outdated. This can be counteracted with outsourcing.
- Increasing know-how: Outsourcing has the potential to increase the level of performance in many areas.
- Standardisation: Especially for large corporations that operate worldwide, similar standards and processes are required that can be achieved through outsourcing.
- Speed: With the knowledge of specialised service providers, processes for companies can be significantly accelerated.
The outsourcing strategy is particularly worthwhile for companies when tasks in certain areas such as human resources are becoming more complex and are to be accelerated by a service provider. Quality and service orientation are important aspects that can be improved by the relocation. If a company’s technology is not up to date, outsourcing can be worthwhile.