Human resources are vital in the company. Employees and workers consist the main force of a business operation from securing supplies and raw materials into providing products and services in the market. However, just like any other resources necessary for the company, it is often impossible to secure all the human resources to operate the company. There are companies located in an area where it could not acquire enough workers or employees for the operation. This is a common problem large corporations are dealing every day. In order for the company to grow, the management can choose several approaches as their HR solution. One way is to expand on another location where securing additional workers and employees is easy. Others will hire from different places and relocate the employees into the company site. And the third option is outsourcing. Outsourcing or allocating some of the company operations to a third-party company or payroll companies is often done by large corporations and here’s why companies choose outsourcing for their business.
- Availability – There are many outsourcing companies worldwide. There will be several outsourcing companies which can accommodate your human resources problems and do the work for your company.
- Cost – If companies choose to expand and build another facility, the cost alone of securing the land, building the facility and hiring additional employees can go to millions if not billions of dollars. On the other hand, outsourcing companies already have these in place and the company will simply pay for the cost of operation. This is far cheaper than expansion. This is especially visible for offshore outsourcing or hiring third-party companies located on other countries with lower labor rates.
- Efficiency – Outsourcing is far more efficient than insourcing or hiring additional human resources. Outsourcing companies value quality and standard thus ensuring quality results and efficient performances from their employees in order to get continued patronage from their clients.
- Expertise – Outsourcing companies have employees trained to handle different services for any company. The company can immediately see the results and reap the benefits of hiring an outsourcing company compared to training new employees for 2 – 3 months which is also requires additional budget.
- Less Hassle – Companies will sometime need to do cost-cutting in case their profit is way less than they expected. The companies can simply end or terminate the contract with less settlement cost or simply wait for the contract to end and choose not to renew it without any financial consequences. This is less hassle compared to settling severance benefits when cutting their own employees.
- Less Responsibilities – By outsourcing human resources, the company is free from any responsibilities on these employees. The outsourcing companies manage everything and all the company has to do is hold their end of the agreement which is to pay for the services. They can still choose to provide benefits and incentives for these employees but this is mostly done by the outsourcing company for them.
If your company is planning to expand but lack the human resources to do so, consider outsourcing as your human resource solution rather than hiring additional employees.