Why HR Function Outsourcing Services for SME’s?

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The Role of HR in SME’s:

In any organization, irrespective of their size, HR function management play a significant role in organizational growth. Not only for the organization, HR functions play a critical component of employee welfare. HR function management includes a list of services such as- Support in Business Planning Process, Manpower needs Assessment, Induct the Employees well, Recruitment Plan, Build Policies and Procedures for Smooth Operations. HR is also responsible for Performance Management and growth of employee at each stage of their life cycle in the organization. HR sits with higher authority for making a critical decision of employee entry and exit. Generally, SME’s business owners they don’t hire HR for until its huge urgency. For SME’s outsourcing is the best option than to hire an HR of their own. SME’s business owners don’t have time to take care of the issues related to the employees and they will get into pending issues as no one else there to resolve those other than the business owner. SME’s generally suffer from the performance issues as they don’t have proper employee management. Any small incident concerned for people can cause a huge damage to the employee self-motivation in the organization.

How HR Outsourcing benefits an SME’s?

The Workforce is the main factors where organization productivity and profitability depends on. HR takes care of the deep analysis of every organization function and integrate that with the employees’ actions for better productivity and development. As these processes need resources to carry out, only one business owner can’t perform everything on their own. Definitely, they need an HR who can carry out these processes for the healthy functioning of the organization. The more the time spent by the business owner in HR process the less will be their effect on the business process. They have to share their time in between the HR and Business process and it will not result in healthy functioning of the overall process. By outsourcing the business owners can concentrate completely on core business processes and new business acquisition. Outsource HR will foresee the statutory changes, employee behavioral patterns and keeping pace with the changing environments. Outsourcing the HR function through an expert would make more time for your business. It also helps an organization to gain the capability of the firm’s engagement with multiple industry exposures and bringing in the best practices and customization. Many business owners know the benefits of outsourcing, but they end up many times with the cost and they don’t focus on the improvement and standardization come into the organization with HR outsourcing. The CEO’s attitude of I can handle alone will kill the entire productivity of the business. HR will undertake the entire burden of employee and business productivity side and the business owner left to concentrate on ideas to develop the business. The other reason, why the business owner doesn’t engage with an outsourcing partner is the fear of unknownand the ability to take a quick analysis of the advantages and taking a decision.

What are the challenges in understanding SME’s?

Many HR professionals and Entrepreneurs are in a dilemma with the type of service need to provide to SMEs. Generally, SMEs dont have any organized way for carrying out every simple task of organization, they just do randomly which comes in their path first. This leads to no proper documentation or records of their function and operations to refer in the future. Also, they cant accurately predict their annual report, which can help them to know their productivity and pitfalls where they can focus on for implementations. All these reasons lead HR professionals to unable to understand what the business owner actually needs from them. It’s the duty of SME’s business owners/entrepreneur to educate HR professionals about their needs, what type of standard or culture they want, what are their short term and long term plans, explain them the business process, the type of talent needed for carrying out the business process effectively by taking regular meetings. Business owners must take the responsibility to educate their expectations, needs and their standards through the industry associations, seminars, and various media/forums. Also, it’s the responsibility of the HR professional to make a list of queries they have with the organization so that they can plan and execute everything according to the business owner’s expectation that will help both the HR professional and business owner to analyze the business operations and work on loopholes that hindering the growth of the organization. Serving SME’s it’s really a tiresome effect for the HR professional if they dont have any proper planning. They have to think with the extremely creative mind for coming with an innovative solution and it's affordable with value for the business. In order to execute HR professional plans and consistently learn, create, add, modify, delete, replan, and restart to survive. HR professional needs an extreme support of the investment community to come forth and support such venture in future. We noticed a positive response over the last decade in a response of SMEs business owners, that is a very good sign for the enterprises in the HR services outsourcing firm.

What are the different ways to outsource the HR functions?

According to Husys outsourcing models, HR outsourcing falls into four categories:

Part HR Outsourcing

This model covers specific responsibilities of HR as a service. Which includes- Recruitment, Back Office Processes, Payroll, and Transactions outsourcing. These services are provided using the software and with the least human interface and for this you can pay on a transaction basis. Pros: Easy to identify and outsource, Easy to take a decision, Easy to monitor the reports everything is provided in ApHusys app. Cons: The task of Integration of the complete business is still left with the Business owner/ CEO.

People Outsourcing

In this case, the HR professionals are trained to provide specific HR services to companies on the temporary/ permanent basis with a clause to transfer them on the rolls of the company eventually. This is also termed as HR Leasing or Flexi/Leased staffing. The payroll and everything of HR leased employee are managed by the HR Professional organization, but they are employed in client business process. Pros: For organizations, it’s a good source to hire the talented HR professional without any efforts of recruitment and can absorb the resource. For employees, it’s flexible and has the choice to get absorbed. Cons: The employees always lookout for new opportunities, no employer can bind the employee until they are offered with some offerings, agreement, internal bonding may be difficult, the employee always have fear of losing the job anytime.

HR Consulting / Coaching / Advisory / Training:

This comes under the expertise HR professionals service based on the demanded time period. In this case, the experienced HR would help the business owner in analyzing, suggesting the remedial action for business growth in an affordable and effective way based on revenue or profits of the business. Many times, the assignments are given to HR experts for a short period of time where the experts spend a specified period of hours by suggesting some changes that can be brought in the organization. Currently, the HR consulting assignments are going more work translation through CEO coaching/mentoring. Pros: No long-term obligation, High expertise availability Cons: it’s somewhat expensive, still the business owner is responsible for the ground level delivery.

HR Function Management Solutions:

HR Function Management covers the entire HR services and support to the business operations. Generally, for SME’s it’s a daunting task to maintain and build their own HR Function Management for their business. Outsourcing will help them to get the expertise HR services to their business, way to tackle the business and administration related issues. This outsourcing will assist you in managing the full lifecycle of the employee in the organization. Also, helps the employer to get the consulting services from experts but also the delivery without having to execute by themselves. Pros: The Best option for SME’s to go for getting the maximum benefits - cost effective and value driven, take care of every HR related function integrated into the business. Highly business focused HR. Cons: This will left business owner with fewer opportunities to take employee decisions leads to heartburns. With the development of technology in cloud computing and the software as a service option paid a new way for the SME’s to get benefited by it and sustain for the long term. Depending on automated technology will be the best source for the SME’s to sustain in future. We at Husys, focus on the trending technology and implement it in our HR operations so that it will be helpful for our SME clients to get the maximum services at an affordable cost.

What are the services that you can get from HR Function Management Outsource?

The type of services comes under HR Function Management is purely depends on the cost you’re putting on it, based on the country you’re living in, business environment and maturity of the teams internally. You can also get the packaged services, that you can select based on your company budgets and your requirements. And if you need some additional services it will add some cost. These can include:
  • Business HR Support
  • HR Information Management
  • Manpower Planning
  • Organization Work-related Policies & Procedures (Leave, work norms etc.,)
  • Compensation & Benefit Management
  • Employee Fun/Appreciation Programs
  • Assignment of expectations on performance
  • Training & Development
  • Employee Selection & On-boarding
  • Business-focused HR initiatives
  • Organizational Design, Role & Responsibilities
  • Measuring Performance Measurement & Career progression
  • Exit Management
  • Additional Services may include:
  • Payroll Management
  • Training Services
  • Recruitment Services
  • IT Deployment for HR effectiveness (inbuilt or independent service)

How you come to know, what you need for your business?

Ask yourself some questions related to your business and HR support you want.
  • Are all your employees have service agreements/contracts?
  • Are you getting the expected performance of your employee?
  • How much productive your employees are?
  • What is the annual turnover of your organization?
  • Is your organization follows every law of the land?
  • How much percentage of your time you’re spending on employee-related issues?
  • Do you know how to ensure the new joiner settles in the organization and contributes fast?
  • Do you know how frequently the job roles are changing your employees?
  • Who are solving the issues related to your employees? You have any procedures to solve that?
  • Do you know how your employees treat the office property/ material etc.,?
  • How you’re managing the people in different locations?
  • Has your vision been clear to the employees of the company?
  • How well you manage the disciplinary issues?
  • Are your managers are capable enough to handle people effectively?
  • Do you have second line management in place?
  • How is the employee social system impacting their growth in the organization?

How can you single out the right partner vendor for your organization?

Here again, you need to ask yourself some questions that can help you to find out those qualities in them and go with them. Here is a list of questions that can help you in choosing the HR function management partner:
  • Does the vendor work with specific service level contracts?
  • How long are they in this field in the market?
  • How capable the vendor to handle the services which you need?
  • Can you make a long-term relationship with them?
  • What is the confidence you get from the vendor’s clients’ history?
  • Are vendor is capable of providing enough support in providing value-added services?
  • What are the proven track records of the employee in the specific service field?
  • Is Vendor capable of helping you in building better business process?
  • Can Vendor help you in building your cultural spirit for business advantage?
  • What are the services they experts in?
  • Can this help you to get the exact return on investment in building your business?
  • Can they bring the best practices from different other industries?
  • How can they help you in building your business process? Or They are capable of preparing the business process of their own.

Do you need to Outsource your HR?

If you’re still not clear with, outsource is required for your organization or not. Please feel free to reach us at reach@husys.net or contact on 091-9948078937. We are here to help round the clock service. You can learn more from our blog: www.hrsme.blogspot.com or slides: www.slideshare.net/grhusys
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1 thought on “Why HR Function Outsourcing Services for SME’s?”

  1. Linda jackson

    In a survey, it has been found that 39% of the companies are using outsourced management services. It increases your productivity. To provide hassle-free and seamless customer service, you should think of going for customer support outsourcing to properly accommodate all the queries of the customer and proper solution. Hopla online deals with outsourced management services.

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