HR Software News

HR outsourcing 'useful for small firms'

Posted by Editorial Team

Outsourcing human resource (HR) tasks can be beneficial for small firms that lack the manpower and skill to provide high quality services, it has been claimed.

According to managing director of Ceridian.co.uk Doug Sawers, less-sizeable companies usually have to concentrate on delivering their core product.

As a result, employing a third party provider to take over the role of dealing with day-to-day task such as HR may seem appealing.

It was noted that small firms are unlikely to be specialists in HR law, delivery or practices, so outsourcing is often a wise decision.

"I know myself from friends and colleagues that the last thing [small business owners] want to worry about is something they're not specialists in," Mr Sawers remarked.

Hiring an outsourcing company will help firms to ensure they meet compliance regulations and keep up with changes in employment law.

The expert claimed that recent changes in the rules have made HR "more and more complex".

Mr Sawers commented: "The EU (European Union) keeps driving in new initiatives which make things a lot more complicated, rather than simplifying things."

An example of this is the change in legislation regarding pensions in the UK, with all companies affected by the auto-enrolment scheme.

Small and medium-sized enterprises (SMEs) were reminded there is a timetable for when this process needs to go live, which is in 2014.

Mr Sawers explained the new pension initiative may be an additional demand on already strained businesses that are focusing on staying afloat and expanding in the current climate.

Therefore, the specialist recommended looking into HR outsourcing options to see if there are aspects that can be handed over to third parties.

Talking to businesses that carry out HR functions every day and is "completely up to date with all those things" was said to be a wise decision.

Mr Sawers claimed combining responsibility for payroll functions may be helpful, as this area is also getting increasingly complex and firms can benefit from specialist knowledge.

The expert advised organisations to look for companies that can deal with tax and compliance issues while ensuring business goals and needs are met.

"I think the HR outsourcing industry is becoming more relevant to small or mid-size companies. HR outsourcing probably started off in very large companies and has worked its way down from huge companies into the SME space," Mr Sawers concluded.

Managing director at Nexus Vehicle Rental John Ellis recently commented that outsourcing HR and payroll solutions can boost a company's chances of achieving its objectives.

Click here to join our LinkedIn group