Title: Benefits of outsourcing HR services to manage remote teams
1Benefits of outsourcing HR services to manage
remote teams
Why is outsourcing HR functions for remote
employees needed more than ever?
One key aspect of why businesses outsource human
resources (HR) functions is due to the
experience of a good return on investment. By
outsourcing HR functions, companies can save
time and resources, which allows them to focus
entirely on their core business activities. This
blog explains several benefits of human resource
outsourcing (HRO) for your remote teams. Its
obvious that HR services are needed more than
ever due to the
2emerging challenges and developments in business
environments after the COVID-19
pandemic. Handling remote resources in
post-pandemic business environments is
challenging for businesses, especially for small
enterprises. With the increasing acceptance of
remote working as the new normal, businesses
need to find different types of approaches to
handle their remote teams effectively. One major
challenge of remote working is the time zone
difference between the employer and employees.
As the internal employees are scattered across
different parts of the globe, setting a common
time for meeting and discussion for a business
becomes difficult. It is also more challenging
for an in-house HR department to manage the
administration of a remote team as well as those
employees working from the office in case of the
hybrid working mode. It would be an ambitious
task for an in-house HR team to handle talent
management and employee engagement if companies
need to recruit more remote employees. The blog
suggests that it is crucial for companies to
segregate the HR services for overseas employees
and manage them separately. This approach can be
more suitable for those businesses with a large
pool of remote employees across different
countries. What is human resource outsourcing and
why do businesses outsource HR functions? Human
resource outsourcing (HRO) refers to hiring an
external agency or third-party organization to
administer human resources on behalf of an
overseas company. It also means the transfer of
the HR responsibilities of the in-house team to
a third-party agency or expert. By outsourcing HR
functions, a business can improve its strategic
planning in addition to efficient day-to-day
administrative support. HRO includes a range of
services from employee recruitment to payroll to
risk management. An overseas company can easily
access a large pool of talent by outsourcing HR
services and extracting the maximum benefits of
these resources. With the right HR outsourcing
partner, a company can manage the remote team
effectively, which can help employee increase
their work efficiency.
3- There are multiple reasons why businesses
consider HR outsourcing services. Although the
cost-saving factor remains a major goal, many
businesses outsource human resources for other
motives. - Availability of talented resources and the
benefits of adding new experiences to the
existing team - Access to new technologies and making the best
use of technology to enhance time efficiency,
expertise, and resource management - Ensuring risk management from economic
uncertainty as locating some operations in
another country may reduce greater risk exposure - Consultative service to leverage market
intelligence and business strategy - Compliance with local laws and regulations
- What are the different types of HR outsourcing
providers? - A handful of service providers offer human
resources outsourcing to overseas companies.
Some of the major service providers offering HR
outsourcing are Professional Employer
Organizations (PEO), Administrative Services
Organizations (ASO), Software-as-a-Service
(SaaS), Business Process Outsourcing (BPO), and
Employer of Record (EOR). - Although there are differences in the way that
these organizations offer services to their
clients, their services normally come under three
categories a single/individual HR service,
group/selective HR services, and all-in-one HR
services. The requirement of HR functions in an
organization may vary depending on the size of
the existing remote workers and its business
nature. - Some HR outsourcing companies provide customized
services as per the clients requirements,
especially those dealing with selective HR
services. Some may specialize only in one HR
service. Lets briefly understand the difference
in their service offerings. - For instance, ASO provides services such as tax
and insurance fillings but doesnt offer
co-employment like PEO. SaaS companies offer only
software and technologies that can help
effectively manage HR activities. BPO offers
selective services and some HR outsourcing
companies offer a single service such as
4- payroll service providers. EOR, on the other
hand, offers services such as payroll, taxation,
and legal compliance in addition to HR functions. - Origin and evolution of HRO a brief history
- Studying the origin of HRO service is complex as
the events around the HR industry have changed
remarkably due to new business environments and
government regulations. However, many studies
delineated the origin of the service back to the
1970s when the concept of employee leasing came
into practice in the US. - Over the following years, the terminology and
concepts associated with employee leasing or
staffing changed due to various policy reforms
related to the industry. These series of
developments helped in the massive growth of
human resource outsourcing globally. - Globalization economic liberalization The
beginning of the 20th century was a vital
opportunity for many HR outsourced firms due to
the new economic structure and business
environments worldwide. The forces of
globalization and economic liberalization
ultimately led to open doors for cross-border
trade and increasing economic cooperation among
countries across the globe. - Payroll service automation The rising popularity
of payroll service and the wide acceptance of
payroll automation in the late 1990s was a
significant development for HR outsourcing. With
technological advancements, payroll automation
enables human error in payroll processing,
employee benefits, and taxes withholdings. - Third-party payroll services With the increasing
demand for inclusive HR services and external
resource management systems, third-party payroll
services gained wide popularity. Gradually,
businesses started shifting from domestic or
local to offshore outsourcing companies for
payroll processing and management. Payroll
outsourcing became a popular aspect for
businesses across industries. - Rise of PEO and ASO The rapid expansion of PEOs
and ASOs in the late 1990s led to the
development of various add-on services to
transactional HR activities. The era has
witnessed the emergence of many outsourced firms
5- offering skill development, training, motivation,
etc. as services to improve the capabilities and
talents of employees. - Business process outsourcing Offshore
outsourcing gained wider popularity due to the
successful running of BPO establishments, leading
to the rapid expansion of HR outsourcing
services globally. - Technology development The rising technological
advancements in the 2000s and later decades have
expanded the information technology - (IT)-based outsourcing for HR functions. For
instance, recruitment process outsourcing (RPO)
was the result of the massive growth of big tech
companies. Also, many outsourcing HR companies
emerged as technology and software service
providers. - What are the key challenges and developments in
HR functions in the post-pandemic? - Many hadnt anticipated that the COVID-19
pandemic would wreak havoc on such a large
scale, affecting almost all businesses across
industries. Several businesses, especially SMEs
were forced to shut down their entire operation
and some had to opt for furlough as a last
resort for their survival. - For those that survived, there was only one
concern how to continue business operations at
a minimal cost. This led to the resetting of
their existing policies and strategies to cope
with the new challenges in their business
environment. They had to consider every possible
option to keep their business buoyant. - The post-pandemic business witnesses remote
working as the new normal and the surge in
technology footprint across industries. For many
companies, managing a team remotely became a
daunting task as they needed different approaches
for handling the teams. Lets explore the major
challenges and developments in the post-pandemic
business environments that cause significant
impacts on the HR functions landscape. - Remote working Working remotely becomes a new
norm and a key aspect of the companys work
culture in the post-pandemic. Companies across
industries have started accepting the fact that
employees prefer working remotely, especially
from the comforts of their homes. The increasing
acceptance of remote working creates additional
burdens for the HR
6- department as they need solutions to ensure
effective communication and engagement for their
remote employees. - Gig workers Financial shortage of companies and
massive layoffs of employees across industries
during the pandemic led to the increasing demand
for gig workers. As a result, the hiring of
independent contractors, freelancers, part-time
hires, and project-based workers gained prominent
attention from overseas companies. Although
having a remote team can be economically
beneficial, many companies are facing challenges
in managing their remote workers. - Technology and digitalization Technology
innovation assisted businesses in handling new
challenges in the post-pandemic. As companies
rapidly shift their business operations online,
they are expanding their digital footprint. This
leads to the rising growth of cloud services and
SaaS HR models. With the help of these IT
service providers, companies can organize HR
services virtually and manage their daily
administrative tasks effectively. Technological
advancements facilitate HR outsourcing companies
to conduct e-recruitment and e-training of
resources located in different places. - Employee engagement and motivation Restructuring
HR practices to ensure better employee
engagement and motivation of the remote workforce
was a significant challenge for many businesses
in the post-pandemic. Businesses handling remote
teams are required to ensure the mental wellness
of their employees besides providing their
physical health benefits. - How is HRO beneficial for managing remote teams?
- HRO services can be highly beneficial in managing
remote teams in several ways. Some major ways in
which human resource outsourcing services can
help in remote team management are - Recruitment and hiring HRO services can help in
identifying and hiring remote employees who are
a good fit for the company culture and have the
necessary skills and experience to work remotely. - Payroll and benefits HRO services can handle
payroll and benefits administration for remote
employees, ensuring compliance with local laws
and regulations.
7- Performance management HRO services can help set
up performance metrics and goals for remote
employees and track their progress toward
achieving those goals. - Training and development HRO services can
provide online training and development programs
to help remote employees improve their skills and
knowledge. - Communication and coordination HRO services can
help in establishing clear communication
channels and protocols for remote teams, ensuring
that everyone is on the same page and working
towards the same goals. - Compliance HRO services can ensure compliance
with local laws and regulations regarding remote
work, such as tax laws and data protection
regulations. - Overall, HRO services can help companies to
effectively manage remote teams by providing the
necessary support and infrastructure to ensure
that remote employees are productive, engaged,
and aligned with the companys goals and values. - EOR way of outsourcing HR services for remote
teams - You may also like to explore the way EORs offer
HR services to overseas companies. In some ways,
both HRO and EOR services can be highly
beneficial for managing remote teams. While
there are some similarities between HRO and EOR
services, EOR services provide a more
comprehensive HR solution for remote employees. - One key aspect of EOR services is that they also
provide legal and regulatory compliance services
in addition to the HR functions covered by HRO
services. - Here, EOR is the legal employer of record for
remote employees working for foreign companies.
It means that EORs take on responsibility for
compliance with local laws and regulations, such
as tax and labor laws apart from offering
services to help improve core HR practices for
foreign companies. - The EOR model can be useful for companies looking
to expand their operations into new markets and
unfamiliar with local laws and regulations of
such new territories. With an EOR partner, you
dont need to worry about hampering the regular
tasks of your remote employees due to time zone
differences and the legal obligations of your
employees.
8If you have a remote team in another country and
need a third-party agency to handle the HR
functions of your resources, EOR can be one of
the most lucrative options. With EOR services,
companies can ensure that their remote employees
are effectively managed and supported, regardless
of where they are located in different parts of
the world.