According to a new and comprehensive report published by Sandler Research, Human Resources Outsourcing continues to be one of the most popular and fastest-growing outsourcing industries. With a projected compound annual growth rate (CAGR) of more than 12% through 2018, the Human Resources Outsourcing industry outperforms almost all other global employment and outsourcing markets:
Outsourcing of Finance and Accounting: 8.04%
Outsourcing of personnel: 4.01%
Document Outsourcing: 5.25%
Subcontracting of IT in health services: 7.62%
Desktop Management Outsourcing: 4.65%
Global collaboration services: 9.18%
Human capital management: 10.05%
Field service management: 4.00%
What is driving the growth of outsourcing of human resources?
Due to slow economic growth, organizations continue to face the challenge of ensuring maximum productivity within their organization, while minimizing costs. According to the report, this need to reduce operating expenses is the main driver in the human resources outsourcing market at present, and it is expected to continue in the coming years.
The second important factor is the need to attract qualified talent and improve productivity.
While much of the report focuses on large and global organizations, the value and benefit of outsourcing HR functions also impact small and medium employers.
How do organizations achieve these objectives by outsourcing their human resources?
- Reduce operating expenses
Human resource outsourcing companies establish long-term Investment professional relationships with large insurance companies and service providers. Through the clients to whom they provide services, the HRO firm represents thousands of employees and negotiates favorable insurance rates and discounts for large groups at various rates and service rates. Known as economies of scale, the RR outsourcing company. H H. It gives small and medium-sized employers access to insurance programs and rates that are generally only available to their larger competitors.
The reduction in expenses can be experienced in some or all areas of the work-life cycle:
Optimized human resources systems
More efficient shipping processes
Labor compliance and reduced liability
Management training courses
Favorable workers’ compensation premiums
Minimized injuries in the workplace through on-site security consultation
Labor Practices Liability Insurance
Group health insurance rates
Profitable voluntary benefits for employees (life, vision, disability, etc.)
401 (k) and plans before taxes
Payroll processing and taxes
- Attract talent and improve productivity
Year after year, surveys, and research reports indicate that employers who invest in their personnel will obtain higher returns and experience higher profit margins than their competitors who do not.
“Investing in employees” means different things to different organizations. However, offering a solid package of health insurance for employees is always at the top of the list. The main medical, dental, life, vision and other voluntary benefits have become almost a fact if companies want to attract the best talent.
As mentioned above, human resources outsourcing companies can offer robust insurance programs to their clients, at a fraction of the cost if they acquire them on their own. These insurance products are packaged and presented in a professional and organized manner that promotes a favorable first impression for potential employees.
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