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The Benefits of HR Outsourcing

Businesses continue to absorb the impacts of the COVID-19 pandemic and the continuing high turnover that has been called “the great resignation”. Human Resources departments are consistently challenged with growing demands, often without a correspondingly higher budget.

Savvy People Operations leaders and executives increasingly turn to outsourcing to tackle certain key projects and even entire segments of the HR function. With the right service provider, this approach can be a way to “do more with less” and enable internal teams to engage instead on more strategic initiatives.

Leaves of absence are an ideal item to carve off to be handled externally. Third-party Leave of Absence (LOA) administrators leverage a combination of software and expertise that make the process smooth and clear for the employee taking leave, as well as their managers. For Newfront clients, LOA outsourcing has grown increasingly popular in recent years; so much so that we have added a new team to help support our clients through this function. Clients appreciate the ability to introduce their team members to a partner who will guide them through the rights, benefits, and responsibilities of their time away from work. Whether due to a new baby, their own medical need, other family care leave, military leave or more, leaves can frequently feel like “uncharted territory” for the employee taking the time off, and they appreciate working with an expert in this space.

HR and Payroll outsourcing continue to be popular alternatives - or even supplements - to traditional in-house People Ops staffing as well. A strong outsourcing partner can help shoulder the responsibilities of these functions for companies who are not yet the right size to have an internal People Ops department. Or they may be tasked to keep the basics running smoothly while the in-house team focuses on other responsibilities. The dramatic increase in remote work in recent years has made HR and Payroll outsourcing even more popular, as there is no longer an expectation that the HR or Payroll department be onsite in many industries.

Finally, projects such as Employee Handbooks, HRIS Technology Implementations and Job Description development may present opportunities to carve out and engage a service provider to complete, in partnership with the internal People Ops team. These can be tough to fit into an already-busy schedule, so sending them over to an external team who works on these frequently can make a lot of sense.

When considering outsourcing certain HR functions or projects, businesses should always review the written contract and make sure there is clear understanding of the regarding the scope of services and associated fees. The website of the Society of Human Resources Management (SHRM) offers guidance about considering outsourcing options and selecting third-party providers. Outsourcing of HR services and projects is expected to grow in popularity in future years, as businesses realize its cost-efficiency and how well it can fit into current business needs. Contact your Newfront Advisor to learn more.


Amy Kelemen

About the author

Amy Kelemen

Consultant

Amy Kelemen, SPHR, SHRM-SCP, is an Executive HR Consultant on Newfront's HR Services team.


The information provided is of a general nature and an educational resource. It is not intended to provide advice or address the situation of any particular individual or entity. Any recipient shall be responsible for the use to which it puts this document. Newfront shall have no liability for the information provided. While care has been taken to produce this document, Newfront does not warrant, represent or guarantee the completeness, accuracy, adequacy, or fitness with respect to the information contained in this document. The information provided does not reflect new circumstances, or additional regulatory and legal changes. The issues addressed may have legal, financial, and health implications, and we recommend you speak to your legal, financial, and health advisors before acting on any of the information provided.

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