18 July 2013
HR Outsourcing
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Impact of HR Outsourcing on Performance of SMBs

The impact of HR outsourcing on SMB’s can be greatly positive, allowing them to focus on their core business functions, instead of HR functions that can be better handled by a third party vendor.

Human resources outsourcing (HRO) is a strategy that many small and medium businesses (SMBs) are adopting today. The first and foremost reason for any process to be outsourced is cost saving. HRO is mainly carried out for reducing the cost and efforts invested in recruitment of candidates and other HR functions. The HR functions that are mainly outsourced by companies include the following:

• Recruitment process outsourcing (RPO)
• Training and development
• Compensation and salary surveys
• Payroll Processing
• Organizational design and development

Outsourcing these HR functions can have a great effect on an organization’s performance. In this article, we will specifically focus on the impact of HR outsourcing on business performance of SMBs.

Effects of HRO on SMB’s

It allows a SMB to divert its energy and investment towards their core business functions. SMB’s can invest their resources on engineering and research & development relevant to their core business instead of investing them in recruiting staff, maintaining records, etc. Since more focus is concentrated on the core business activities, you can experience an accelerated growth in your business.

Impact of HR Outsourcing on Business Performance

Building an efficient HR department can also prove to be a positive effect of HR outsourcing. This will help enhance the workforce hired in your organization, thus improving business performance as well. Unlike large enterprises, SMB’s often find it difficult to manage payments of varied workforce in a short timeframe.

Outsourcing your HR functions can help solve this problem, since the team taking care of your organizations payroll is well versed in handling a varied workforce and their different payouts.

To conclude, the impact of an HR outsourcing firm can be seen as a wise, long term decision as with the growth of your business. Especially in small business hr outsourcing will help your internal HR department with improved services.

If you are a SMB and want to outsource all or part of your HR functions, Rishabh BPO can provide you with the required guidance and information. Call 1-877-RISHABH (1-877-747-4224) or fill in the contact form.

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