top of page


192.expand knowledge.png

Unlocking Specialized HR Knowledge Benefits of Outsourcing HR Functions

Human Resources (HR) has numerous important functions within the organization. On top of the usual recruitment, compensation and benefits administration, performance management, and learning and development, HR today has to adopt a more strategic and forward-thinking mindset. This includes human resource planning, legal compliance, and career and talent development. Further, with the acceleration of technology permeating organization’s operations today, it is not surprising for HR to also adopt tools and software to automate and digitalize administration and manual HR processes.

As organizations aim to be more efficient within the HR department while reducing the amount of paperwork, many are turning to outsourcing payroll functions. Figures from ExtensisHR revealed that the HR outsourcing market is expected to grow by USD10.90 billion by 2026. In-demand outsourced HR functions including payroll, staffing, executive recruiting, and benefits outsourcing and consulting. Aside from the operational efficiencies and cost savings associated with outsourcing HR functions, one of the biggest benefits for organizations is the ability to tap into the specialized HR knowledge that these outsourced HR providers are able to offer.

Legal Compliance

HR regulations and employment laws are highly complex and subject to frequent changes. One of the most daunting tasks for an organization is complying with the ever-changing laws and regulations, particularly if they manage a global workforce. To avoid running afoul of the law, HR needs to have in-depth understanding of the various HR legislations across countries. This includes being on top of labor laws, tax, immigration, statutory benefits, and insurance laws.

Outsourcing HR compliance management to a trusted service provider is an efficient solution for organizations to meet complex HR and employment regulatory requirements without sacrificing valuable internal resources. These external HR consultants are highly knowledgeable about local, regional and global HR laws, and will ensure that the organization’s HR policies and processes comply with existing rules. Access to this specialized HR compliance knowledge helps organizations to better understand HR and employment regulations and also implement their own internal precautions to avoid penalties and unnecessary audits.

Talent Acquisition

Attracting and retaining top talent is essential for organizations to grow and stay ahead of its competitors. It is vital for organizations to build an effective recruitment selection process, as bad hires can result in drops of up to 36% in overall productivity levels. Given that one of the most time-consuming and costly HR processes is recruitment, this is where organizations can tap onto an external HR service provider to streamline the entire hiring process.

Most third-party HR service providers are able to support organizations on the end-to-end recruitment and selection process, from reviewing stacks of applications and screening of potential candidates to setting up interviews and shortlisting qualified candidates in line with the organization’s requirements. These HR service providers often have extensive networks and recruitment strategies, and are highly experienced in assessing and selecting qualified candidates, particularly when it comes to senior or even C-suite level positions. Organizations are able to tap on their network and effective recruitment strategies to access a broader pool of talent.

Employee Development

Investing in employees’ career development is key to building a skilled and engaged workforce, and can even boost an organization’s profitability by up to 21%. Hence, it is imperative for organizations to have in place robust learning and development programmes, while being mindful that there aren’t more full-time positions than required as training programmes need to be updated periodically. One way to manage learning and development programmes effectively is to engage a service provider that is able to support training design, development and deployment.

A service provider that specializes in employee training programmes is able to monitor the organization’s training needs and then address them with a package of training programmes, materials, train-the-trainer programmes and logistics support to close these knowledge gaps. This may also include administering training programmes through a learning management system as well as coordinating employees’ learning schedules with the necessary learning classes and pre-work materials.

These external learning and development experts may also offer advisory on aspects of employee development, such as performance management, leadership coaching and succession planning. Leveraging an external learning and development service provider allows organizations to deliver personalized and relevant training content catered towards employees’ career aspirations and professional growth, while building a highly agile workforce.

HR Technology

HR software tools play a vital role in streamlining HR processes, driving operational efficiencies and enhancing the overall employee experience. In fact, over 70% of organizations today are already leveraging on data analysis for key decision making, with slightly over a quarter (33%) of HR teams using some form of AI technology within their HR functions. Yet, spending on HR technology is still fairly conservative and expected to increase by less than 2% in 2023.

To get the most out of HR technology while optimizing HR budgets, HR outsourcing may just be the solution. Outsourcing all or part of HR functions offers organizations access to the latest and state-of-art HR  technology without having to fork out hefty costs on software implementation and upgrading. Organizations can also leverage on these payroll service providers to deepen their understanding and internal capabilities when it comes to HR technology.

As HR today shifts towards being a strategic business function, it is imperative to find ways to tap onto specialized HR knowledge in order to drive people and organizational success. Outsourcing HR functions is a great solution for organizations to enjoy operational efficiencies and cost savings while allowing the HR team to focus on implementing strategic initiatives. Further, it provides HR the ability to tap into in-depth HR expertise that external HR services providers are able to offer. This enables HR and businesses to stay ahead amidst the highly competitive talent environment today.


bottom of page