Outsourcing HR with Efficiency and Cost Saving
Human Resource (HR) functions often account for a significant share of a business’s operational cost. As a result, small business owners, time and again, may tend to handle those functions themselves. However, there is an alternative to outsourcing HR functions which ultimately saves time and enhances efficiency.
How Businesses in Africa Can Outsource HR Functions to Reduce Cost and Increase Efficiency
Small businesses in African countries such as Kenya, Nigeria, South Africa, Zambia, Ghana and Tanzania can outsource some HR tasks like payroll processing, talent acquisition, career planning, HR technology and compliance and risk management. How exactly can a business outsource HR? There are three major ways of HR outsourcing:
- Professional Employer Organization (PEO) - PEO applies a co-employment model such that a business co-employs personnel, manages them and oversees their work efforts. On the other hand, the PEO is focused on managing HR tasks such as payroll services, employee benefits, employee compliance, employee development etc.
- Application Service Provider (ASP) – ASP develops software or systems that simplify HR practices through automation. It then offers this kind of resources to individual businesses/companies to help their HR teams with functions such as payroll processing, onboarding, performance management, compliance, time management and records management. An ideal example is an HR and payroll system like Workpay.
- Administrative Service Organizations (ASO) – ASO’s approach is more like total HR outsourcing whereby one third-party company manages all HR functions from employee recruitment & hiring and performance management to payroll administration on behalf of a business.
How does HR outsourcing boost efficiency and reduce costs in a business?
- It allows a business to focus more on other core/crucial business processes like improving their products/services.
- It helps lower your internal HR expenses.
- It allows a business to access a pool of top talents and skills worldwide.
- It reduces complex compliance burdens for businesses, especially when hiring employees from different countries.