January 21, 2012: In the current scenario many companies believe that Human Resource is a non-profit center and it is always better to outsource HR functions. There are many companies which today focus on outsourcing human resource activities so as to reduce the cost incurred in maintaining the functions of work force. Human Resource outsourcing is a difficult business decision as far as any company is concerned as it can have many adverse and unexpected outcomes.
Almost every multinational company relies on Business Process Outsourcing agreements to maintain various HR functions such as record-keeping, payroll and benefit administrations. Some of the studies state that, most of the time it is the typical non-strategic administrative functions which are outsourced. But, in the recent time the trend has changed and companies are also thinking of outsourcing strategic functions such as organization design and many more.
However, there are mainly three corner stones of outsourcing which has to be given more emphasis by outsourcing companies to build a strong platform to enrich the BPO agreement. Out of which the first one is obviously the cost reduction.
- It is a know fact that outsourcing is all about cost gains. If companies are adopting strategic outsourcing only because they want to reduce the cost of the process then there is little to worry because, the guarantee for success is very less. Even experts have the opinion that cost savings alone will never guarantee outsourcing to be successful.
- The second most important corner stone is the efficiency gains. To gain efficiency, one should always depend on a service provider who is skilled enough and have the resources to deliver required services. Success is possible only if the outsourcing partner has the ability to innovate with technology instead of relying on the traditional technology.
- The third important corner stone is ‘Transformation Gains’. Depending on HR models such as SIPP will help companies in many ways. This will obviously deliver a platform to reduce cost along with innovation on standardization.
Well, if the three pillars are at the right place then success is an obvious result. The potential success of HR outsourcing will increase significantly if the companies give more priority in placing the pillars at the right place. Any company which looks for the benefits of HR outsourcing must take care of these three factors so that the Human Resource Outsourcing Business Process Outsourcing agreements move in the right track.