While on the surface the outsourcing of human resource services (HR), may seem a bigger business ‘thing’, even the smallest of business operations could apply the same concepts for benefit.

Today an estimated 50 percent of small and medium sized enterprises (SME’s) outsource all or part of their human resourcing (HR) needs, with smaller, leaner businesses like Franchise companies getting in on the act.

So why do companies outsource their HR?

1. It makes commercial sense. It frees them to concentrate on important activities that produce revenue, like franchisee support, sales and marketing. HR does not increase revenue in itself, yet it can burn a lot of a company’s time and energy. A great HR department demands resources and innovation. Many companies would rather focus on their strengths, like making money, by outsourcing HR.
2. It saves money. Running an effective HR department, even with one HR Manager can cost a lot of money. Companies are now preferring to hire in HR experts at a fraction of the cost. This kind of virtual workforce now has an irresistible momentum.
3. It improves compliance. There is a complex jungle of employment regulations out there these days. When companies hire an HR compliance specialist, these headaches go away.
4. It improves recruitment. Recruiting top talent is about finding unique talent, that is not easily found by competitors. Many companies would rather turn this critical function over to an HR & Recruitment company that does nothing but recruit talent and develop relationships with their star candidates.
5. Get the latest tools and technology. Through their HR provider, companies will vicariously have access to the very latest technology, including big-data mining, analytics and social media and will know how to get the best out of the technology to meet a company’s specific needs.

So what sort of HR services are we talking about?

Services can range from Recruitment to Outplacements and from Employee Engagement activities to Equity Plans. These services can be individually hired in on a needs basis or, what is becoming increasingly popular, is having many of the services bundled into a low cost monthly fees. 

Some HR companies provide the following as a bundled offering:

• Remuneration Benchmarks
• Employee Engagement Strategies & Activities
• Systemising Common HR Functions
• Onboarding Talent Management
• Outplacement Services
• HR Legal Advice
• Recruitment 
• STI & LTI Planning
• Equity Planning
• Associated Tax Planning
• Leadership Training
• Executive Coaching
• Team Building