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Top questions to ask when considering outsourced HR

Published on March 21st, 2018 by Triton Benefits & HR Solutions

Outsourcing has always been a popular option for business, enabling internal staff to focus on mission-critical tasks while transferring certain responsibilities to external experts.

According to JobScience, about half of all Fortune 500 global companies leverage outsourcing, including for financial, IT, sales and marketing and other activities.

As internal company needs grow, HR departments needs to address complicated state and federal regulations, staffing, payroll, corporate training, benefits administration, etc.  HR outsourcing is an area companies need to consider. 

The current state of outsourced HR

Outsourced HR support is currently used by 11 percent of businesses, and is one of the top outsourced services behind financial and IT. With all of the critical responsibilities that fall on the HR team, it isn't surprising that these essential functions are being outsourced.

As a survey from the Society for Human Resources Management demonstrated, there are several reasons that organizations large and small are turning to outsourced services:

  • Save money (26 percent of companies).
  • Focus on internal strategy (23 percent).
  • Improve industry compliance (22 percent).
  • Enhance accuracy of internal processes (18 percent).

Whatever the reason, outsourced HR can be a considerable benefit for businesses in any market. 

"Human resources outsourcing makes sense as a way for smaller companies to transform and get expertise without hiring in additional personnel at high salaries and keep in-house modest and focused on employees," JobScience contributor Nolan Gray wrote. "For larger companies, compliance can be a huge risk as can legal liability, so outsourcing grants extra layers of protection."

Choosing the right HR partner: What to ask

However, as outsourced HR needs grow, so too does the market of providers, and not all outsourced HR vendors are the same. With such a critical business function, it's imperative that organizational leaders select the outsourced HR partner that suits their requirements.

Person drawing on a chalkboard, icon of a person in a suit draw inside of a lightbulb, surrounded by gears/cogs. Outsourced human resources services can be considerably beneficial for organizations of all sizes in every marketplace.

There are a few key questions to ask when considering vendors, including:

  1. What services does the vendor support? As American Express contributor Kate Lister noted, it's important to consider both current and future needs here.
  2. How do services work and how are they delivered? This can be an especially important consideration if the company has remote employees. It's imperative that employee-facing systems and processes are accessible via a secure online portal.
  3. What kind of metrics and reports are provided? Whether stakeholders are curious about recruitment efforts, fill rates, benefits administration resources or other services, the vendor should be able to provide reports to show the support they are providing.
  4. What kind of experience do staff members have? As 18 percent of companies decide to outsource due to a lack of in-house experience, it's important to make sure that the chosen vendor's employees have the necessary skills and knowledge to fill the talent gap.
  5. How are upfront/ongoing/additional fees determined? Decision-makers shouldn't be in the dark when it comes to cost, and it's important that they understand any additional costs that may come in outside of regular service.
  6. How does implementation work and how long will it take? Executives and stakeholders should ask about technology deployment, including the necessary software or cloud assets required to support services.
  7. What sets the vendor apart from others in the marketplace? It can be helpful for decision-makers to hear in the vendor's own words what makes them different from other providers and why the company should choose them.

Finding an outsourced HR partner involves important decisions and considerations, but the right vendor will be able to support your company and your employees now and throughout your business lifecycle.

To find out more, connect with the experts at Triton Benefits and HR Solutions today.