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Before outsourcing human resources have been an option by many, it has always been an in-house endeavor. In the first place, acquiring people to fill in roles is an integral part of building a company. Keeping people you trust close to you is a good way to cultivate a company culture and rapport through face-to-face consultations.

What is human resource outsourcing?

HR outsourcing involves hiring an external company to take over some or all of the HR functions for your business. This can include recruiting and hiring, benefits administration, payroll management, employee training and development, and legal compliance. By outsourcing these tasks, companies can save time and money while also gaining access to specialized expertise and technology. Additionally, HR outsourcing frees up internal resources to focus on core business functions such as innovation and growth.


Why do companies turn to subcontracting their HR functions?

In today’s competitive business world, companies always seek ways to cut costs and increase efficiency. One area where many companies are turning to outsourcing is human resources. Outsourcing human resources have become a popular option for companies of all sizes and industries.

So here are the reasons why companies opt to outsource their human resource management processes.


1. Cost Savings

The highest cost of doing business is labor costs, and that can account for up to 70% of overall company expenditures. That includes a full-scale human resource department. You’re paying not only for the salary of your HR manager and assistants but also for the facilities and materials they need for every recruitment process.

So that is why one of the most significant advantages of HR outsourcing is cost savings. Companies can save money by contracting other companies for HR functions such as payroll processing, benefits administration, and compliance management. By outsourcing these functions, companies can avoid the cost of hiring and training new HR staff members. They can also benefit from the economies of scale that outsourcing providers offer, such as finding an offshore outsourcing partner they can trust.


2. Focus on Core Business

Focus is a state that no money can ever fully buy. That is why it’s more than a bargain when there is an opportunity to free up some time for business owners and executives. Outsourcing any part of your business means one less department to worry about. In the same way, outsourcing HR functions allows companies to focus on their core business activities. By handing over HR responsibilities to a third-party provider, companies can free up resources and time to focus on their core business activities. This can result in increased productivity and profitability.


3. Access to Expertise

Human resource providers are typically staffed by experts in their field because recruitment is their forte. Companies can access this expertise by subcontracting recruitment functions and benefit from best practices and industry knowledge. This can help companies to stay compliant with laws and regulations, reduce risk, and improve overall HR processes.


4. Scalability

Human resource providers can scale their services to meet the needs of their clients. Companies can easily adjust their procurement of recruitment services as their business grows or contracts. This flexibility can be particularly valuable for small and medium-sized businesses that may not have the resources to hire full-time HR staff. OBPO Managed Services are one of the Human Resource providers that cater to even the smallest businesses.


5. Improved Technology and Strategy

HR outsourcing providers typically invest in the latest technology and software to support their services. They also invest in recruitment marketing strategies to get the best talents by the schedule. By outsourcing human resource functions, companies can benefit from these technological and strategic advances without investing in expensive software, hardware, or specialized manpower.


6. Reduced Risk

HR outsourcing providers are experts in compliance and risk management. By outsourcing HR functions, companies can reduce their risk of non-compliance and associated penalties. Human resource outsourcing providers can help ensure that companies are up to date with all relevant laws and regulations, and they can provide guidance on how to mitigate risk.


7. Improved Employee Experience

HR outsourcing providers can help to improve the employee experience. By outsourcing HR functions such as benefits administration and payroll processing, companies can ensure that their employees receive timely and accurate information and payments. This can help to improve employee satisfaction and engagement. Furthermore, Business Process Outsourcing companies understand how to increase employee retention by creating a culture of sustainable employment setting.




Outsourcing offers many benefits for companies of all sizes and industries. From cost savings and improved efficiency to access to expertise and reduced risk, there are many reasons why companies are turning to delegating human resource tasks to BPO providers. As the business world continues to evolve, HR outsourcing is likely to become an even more popular option for companies looking to improve their HR processes and stay ahead of the competition.