Outsourcing has been a buzz word in the business world for long now. HR outsourcing is the widely used among all. HR processes like payroll management, human resource management , employee benefits etc are outsourced. There are several reasons for outsourcing the processes like low budget, less staff or to avoid an HR department all together. The HR services could fall into categories i.e. PEO, BPO, ASP and E-Services.
PEO or a professional employer organisation takes the responsibility of HR processes. The firms act like parteners. For HR a BPO means that organization has access to all latest technologies. Softwares are uploaded on web and sold via ASP’s. Web based HR services are known as E-Services.
HR outsourcing is the hottest in the industry. Most of the big names are outsourcing there requirements to outside firms. It is a big business & almost two third of the companies studied for HR outsourcing had adapted to the same. The most commonly outsourced processes are those of payroll management, pension management, program management etc. A deeper look these processes would show that these are basically accounting function by their very nature. Thus, it is quite pradoxical that most of the functions outsourced are accounting processes more than HR.
In India its hard to separate from any function that touches the employee’s directly however a reiteration of HR processes its moving towards the board room. The basic processes like recruitments, payroll management, pension management etc are outsourced & attention is paid to strategic decision making. More and more companies are adapting to HR outsourcing not as a fashion but out of choice.
There has been a shift towards managing the results. there is a trend of attracting employees and retaining them. Earlier it took loads of time to cater to an employee query but now an employee can log in and view its details instantly. HR now contributes to the strategic processes of business world more than before.
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Great informative post. Yes, HR and accounting does often overlap, and it makes sense that both are outsourced for certain businesses.
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