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Outsourcing HR services is commonly thought to be a strategy used by small and medium sized businesses, not necessarily by large companies. Large companies have HR departments and a staff of human resources professionals. They can handle all of the company’s HR requirements, right?

With companies clamoring to keep up with their competitors, technology, and gain access to top HR talent, often it’s easier to outsource certain HR functions.

REASONS WHY LARGE COMPANIES SHOULD CONSIDER OUTSOURCING

A survey by The Society for Human Resources Management (SHRM) identified the most common reasons why companies choose to outsource:

  • 26% of companies outsource to save money
  • 23% of companies outsource to focus on strategy
  • 22% of companies outsource to improve compliance
  • 18% of companies outsource to improve accuracy
  • 18% of companies outsource due to a lack of experience in-house
  • 18% of companies outsource to take advantage of technological advances

Other reasons why companies outsource include consulting companies offering services that cannot be offered in-house, and it allows companies to focus on core business.

3 REASONS WHY LARGE COMPANIES OUTSOURCE HR

Many of the reasons mentioned above are cited by large companies when they choose to outsource various HR functions. Here are some additional HR-specific reasons to outsource:

1. TO REDUCE PRESSURE ON INTERNAL HR:

Many HR departments are understaffed and overworked. They have more work than they can handle, but your company can’t afford to hire more full time employees. Outsourcing is a cost effective way to take some of the pressure off your current HR staff.

2. TO ACCESS EXPERTISE FOR SPECIALIZED FUNCTIONS:

Sometimes, hiring a professional who specializes in a specific HR function doesn’t make sense long term. This is why many large companies outsource HR functions such as hiring, payroll, and administering employee benefits to consultants on a part time or as needs basis.

3. TO GAIN ACCESS TO RESOURCES:

HR consultants are on the cutting edge of new technologies, trends, and processes in HR. Rather than investing huge amounts of capital internally, you can gain access to these resources through an HR consulting company, freeing up budget money to spend on other areas of your business, and within your in-house HR department.

READ MORE ABOUT THE BENEFITS OF OUTSOURCING HR

Check out these insightful blog posts by our HR professionals about the advantages of outsourcing HR:

4 Reasons Outsourcing HR Can Help Build Your Company

4 Tips for Short Term HR Outsourcing

4 Tips for Long Term HR Outsourcing

Felicia Smith

Felicia is the manager of human capital solutions at AugmentHR. With over six years of recruitment experience coupled with multi-faceted HR roles, Felicia is an expert in matching people with the right role and environment. She has worked in many different industries, including investment banking, HR consulting firms, medical, and commercial. Understanding people is one of her strengths, and she has recruited at every level, from directors, project managers, and engineers to operators and general labourers. Her ability to network and develop relationships has been a key tool to her success. With approximately two years of experience managing people and creating a positive work environment, Felicia’s diverse skill set makes her a well-rounded individual. Her business education and background help her identify different business needs and human capital solutions.

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