Below are reasons why some companies outsource:
1. Cost savings
- Eliminates cost of initial hardware and software investment and its subsequent maintenance
- Reduces spending on technology upgrades due to obsolete functionalities and changes in statutory requirements
- Control operating costs as fewer employees needed to perform these administrative tasks, thus maintaining low headcount.
2. Other indirect time/cost savings
- Reduces errors from manual handling of data
- Reduces risks involved in security and confidentiality issues
- Opportunity cost from redeploying HR resources and investments to other areas
- Reduce risk of fluctuating employee turnover and the need for recruitment and retraining, thus ensuring a stable operational environment
3. Change in company focus
- Reduce the time spent on administrative task and to refocus on strategic planning initiatives
- Reduces financial risks involved in non-compliance of legislative, corporate and technology changes
- Growing need for companies to leverage on established HR service providers for information and expertise that are not available internally
- Strategic partnership with HR service providers enable more flexibility and tailor-made solutions for ever-changing operational needs
- Increase employees satisfaction as a result of more timely and accurate response to their HR issues and queries.