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Will HR outsourcing increase or decrease post Covid?

This ongoing COVID-19 crisis has adversely affected the life of every living soul on this planet. This pandemic drastically transformed the job market scenario where many people are jobless, and the maximum of the remaining workforce is bound to do remote work. HR outsourcing is the best choice small business owners have to propel their efficiency affordably and it will also continue being popular post corona.  

SMEs and SMBs opt for Outsourcing to infuse more efficiency and scalability to their daily workflow without upsetting their budget. HR is one department where Outsourcing can be of immense help. 

Subcontracting your recruiting, employee management, payroll processing, and other salient HR activities to a certified external service provider helps to function smartly and efficiently. The previous year also HR outsourcing trends were quite encouraging. 


What makes Outsourcing so popular? 

Outsourcing signifies the process of finding, recruiting, and collaborating with an external third-party service provider. SMEs and SMBs commonly opt for Outsourcing to subcontract those vital business activities that are time-consuming and repetitive, for example, the recruiting and payment processing tasks. 

Outsourcing is in practice across the globe. The globalization of outsourced goods and services is highly effective in helping enterprises to propel their profitability. 

A lot many factors are instrumental in increasing its widespread acceptance. Cheaper salaries/wages, impressive currency exchange rates, and a wider range of facilities are the prominent reasons for its growing success. 

In brief, Outsourcing is an industry of its own now, delivering specialized services and products for private and commercial companies. Over 68% of businesses now outsource their business activities to third-party providers. 


The Pandemic Impacting the Outsourcing Arrangement

The flaws in the traditional model of Outsourcing surfaced during this pandemic prominently. The future outsourcing arrangement is bound to undergo certain significant transformations to embrace the “new normal”. The ongoing pandemic has jeopardized the global economy.  All small-big enterprises are finding ways to cope with it. 

It seems a more practical decision to outsource the HR requirements to a certified and experienced external service provider. You can benefit from their HR expert services without having to maintain an in-house HR team.  


The Increasing Importance of HR in COVID-19 crisis 

During the lockdown, several companies continued functioning through the remote working arrangement. Post lockdown phase, it seems that remote working arrangement will continue to exist for an indefinite period. It increases the importance of the HR manifold. 

There is an urgent requirement for new policies and procedures of operation to coordinate better with employees working from home. A skilled HR can only manage the workforce remotely, ensuring timely service delivery without violating its regulatory compliance and the corona guidelines. 

The employees and other members must stay aware of the company policy and service process changes. Also, they need to be informed about why the company is implementing these. 

Who else is supposed to manage all these responsibilities other than a skilled and knowledgeable HR? 

The way a company handles the situations during this pandemic is bound to impact the employees. A smart and effective HR strategy ensures that the employees have the reasons to feel proud to be a part of the company.

It indicates that the importance of HR will increase further to cope with the pandemic’s challenges. There is no way a company can manage the work from home arrangement without seeking HR services. 


The Fastest Growing HRO Segment- Payroll Outsourcing

In the global market of HR outsourcing, subcontracting payroll processing is the fastest-growing segment. The two significant reasons for this trend are cost reduction and ensuring compliance. Post-Covid, the Government of all nations is introducing and implementing new agendas of compliance on the employees. 

Remote working arrangement and digital workplace culture make it necessary for  the payroll processing activities to stay in tune with the new changes. The HR ensures this tuning goes fine and effortless. 

Reputable professional service providers offer cloud-based HR solutions like 

  • Payslip distribution
  • Time and attendance management
  • Onboarding/Briefing new employees
  • Administering business trips and benefits 

An array of many such HR modules integration can help the companies in this pandemic operate at its full-throttle over their in-house teams.

Under payroll processing, it helps in

  • Payroll data transmission virtually
  • Handling payroll enquiries via online tickets
  • Payslip distribution and archiving
  • Benefits administration

Now, the answer seems easier to arrive at

By carefully examining the changing work culture and HR’s service responsibilities, we can say HR outsourcing will continue flourishing. HR outsourcing can 

  1. Save time that you can invest in other business core activities. 57% of organizations opt for Outsourcing to focus on their core business activities. 
  2. High-level automation and additional expertise add more value to your business. 
  3. The availability of additional expert knowledge databases facilitates better decisions.
  4. HR online portals and self-service solutions that the external provider offers during the pandemic
  5. Cloud-based outsourcing solutions support the remote working culture better.
  6. The sophisticated software and advanced IT infrastructure enhance employee data security.

All these claims establish  beyond doubt that the HR outsourcing trend will keep escalating during and post corona. It will stay for the foreseeable future. Companies cannot ignore the importance of HR and also have to agree that subcontracting the HR activities to a third-party provider will be the best decision. 

The Distinguished Vice President of Gartner, Brian Kropp, stated that their research discovered that 32% of companies are replacing full-time employees with contingent workers for reducing cost. 


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