HR Outsourcing refers to outsourcing human resource functions like recruitment, payroll management, and executive search to external specialist companies. This is done to cut costs but also provides other benefits. HR outsourcing companies take care of recruitment on an ongoing basis, leveraging existing candidate databases and portals, saving companies time and money compared to handling recruitment internally. They can also conduct performance appraisals, employee satisfaction surveys, and help improve processes like the performance management system in a neutral, unbiased manner that reassures employees. Outsourcing various HR functions allows companies to benefit from specialist expertise while reducing workload and perceptions of bias for internal employees.

1. HR Outsourcing
HR Outsourcing is well known as Human Resource part of a company given to another
company whose business is to manage Human Resource of other companies; in short they
specialize in Human Resource. This is done to cut the cost, but it is not only about the cost;
there are other aspects of the HR outsourcing which are important for the companies and
employee to know. The most common activity that we relate to HR Outsourcing companies is
recruitment, placement and executive search; few would also associate with payroll
management. There are few more things that an HR outsourcing company does, we shall see
all those and more to understand why HR outsourcing is important.
Let us start with known services that HR outsourcing companies provide like:
Recruitment, placement and executive search, these all indicate to one thing- job to candidate.
A company has its own many ways to recruit, like reference. Reference recruitment in many
companies has created groups in employees. These groups, in some company also have
created problems; many HR’s may have been reading about it. Also in reference recruitment I
have seen influence of seniors coming into action and good candidates are left out. These are
just few reasons why reference recruitment doesn’t help company; it saves money but digs
traps. Second way of recruitment is HR buying portals and recruiting, this is even costly, as
we all know the portals we buy, and the annual price for the service is lesser as compared to
any other plan. Company do not recruit round the clock 365 days, so no point buying it,
anything lesser than 1 year is cost affective. HR outsourcing company recruit 365 days for
their clients, they have the portals, and also they have few candidates in mind. So if a
company is thinking about recruitment through portals, better give it to HR outsourcing
company who are using it and already and having candidates, its quick and easy, saves time
and money. Company’s HR would buy the portal, search and sort the candidates and call for
interview; not a day’s job, the company who loose time and money. Here also a company
cannot say that the recruitment was done without any partiality or without any inclination.
The other services that HR outsourcing companies offer is performance appraisal, employee
engagement, employee satisfaction survey and trainings. Performance appraisal in company
is a very critical time, I have seen after annual performance appraisal in many companies,
few employee leave the company. Many times it is because the employee thinks there was
partiality. This can be easily removed by outsourcing it to HR outsourcing company. Here the
employees know that the process is in third party’s hand, and they have no reason to suspect

2. partiality. Also, the HR outsourcing can be open about the employees performance and give
them reason for no/less appraisal, and how to go about it by being in the same company,
rather than leaving it. When companies say the same thing the employee think it is a mean
step to retain, but when said by third party it is an advice to go for. There are again many
other reasons as well to outsource performance appraisal.
Employee engagement, it is an activity mainly performed HR of the company, but we have
seen decline in the frequency and the number of activity carried out in the company. Also we
have seen many employees are not interested in these activities whereas some are super
excited about it. An HR outsourcing company sees to it that each and everyone is involved in
these activities and the frequency of these activities is high and the normal functioning of the
company is improving, thinking of activities, and implementing and getting employee
involved is easy for them (HR outsourcing) as it’s not the senior or HR of the company who
is holding it, there is no hesitation, nervousness or shyness.
Employee Satisfaction, this is something many companies think is not that important thing to
do with employees, but let me explain why this is the best thing a company can do. Employee
satisfaction measurement is done by survey regarding compensation, workload, perceptions
of management, flexibility, teamwork, resources, etc. These parameters are very important to
know your employee, but if the HR or the company is doing it, they most of the time get
incorrect answer. This is because the employee does not want to risk their job by giving their
perception/ideas/opinion. When the same thing is done by HR outsourcing company these
perception/ideas/opinions come freely because the HR outsourcing company does not give
the details of which employee said what. Also they know that the id by which they are
referred is not known to the management or HR of the company. The result of this is that the
company will know loop holes and problem regarding the employees and employee
satisfaction survey will help for sure to the company and employee to an extent that it will
bring a visible change and growth. There are further thing to do with employee satisfaction
survey also, which we can see later.
Standard Operating Procedure/Protocol (SOP). This is something that many companies prefer
doing themselves, which is perfectly correct. SOP of a company is how its CEO wants. It
should be in synchronization with the vision of the company and employees working by it.
HR outsourcing company here look at the upgrading, updating and improvising the existing
SOP to yield high output. No wonder it can be done by the company’s management or HR,

3. but looking at it as a third person, we can address the safely and efficiency in neutral and
unbiased way. This is because the management is always blamed of only focusing of
productivity. A SOP from third party is always an advantage for both company and
employee.
Performance Management System (PMS). We know that PMS is that the company align
resources, systems and employees to strategic objectives and priorities. Here employee
management and their performance are of most importance. The company has to see that the
employee complete their goals consistently. We do have team leaders, manager, department
heads and HR to see these things, but still we see many companies are not able to achieve
their objective in time. Here an HR outsourcing company help the client company manage
the employee so that they complete their goal, not only that but they increase their goals. This
can be achieved by many methods few of them is counselling, one on one interview, group
sessions, etc. In these methods the employee is explained how to align their personal goals
with the goals given by the company and how to achieve them. There are many other things
involved in PMS besides this. Which we shall see later
These are the few services that an HR outsourcing company provides and the few reasons
why they are outsourced to them. For more details on each individual services we shall blog
in some time, till then help us with your views and opinions.
Starten Solutions LLP.