A survey conducted by Heliview reports that even today Human resource professionals find it difficult to recruit and retain talent for the key posts. The executives face the serious challenge of retaining and developing the top talent. Additionally, reducing and controlling the HR costs is always in the mind of most of the professionals. In SME’s the executives try to tackle these problems by outsourcing the HR functions. As the executives lack the time to tackle these challenges, outsourcing is a favorable choice.

The current scenario

What makes retaining talent more difficult these days is the changing expectations of the workforce. A recent study by Accenture concludes that young people with high potential lay greater importance to a rewarding lifestyle than carving a long-term career in a single organization. Thus, retention becomes a big challenge. Bearing in mind the size of SMEs, outsourcing the human resource functions is a healthy approach to tackle these problems. By moving some of the HR work outside from the internal team, the HR executives save time and concentrate on core objectives of the organization.This in turn strengthens the corporate strategy and takes the business to new heights.

Vital Statistics

From a study conducted by ADP we concluded that two HR functions which SMEs prefer to outsource are training and development. However the study revealed few crucial country differences. Italy and Poland had higher number of companies which were turning to outsourcing of the human resource functions when compared to Germany,France and Switzerland.

Crucial drivers for human resource outsourcing

What drives SMEs to outsource the HR functions are:

ü  Greater focus on the core business objectives

ü  Higher and faster access to the emerging technologies

ü  Attaining greater flexibility to adapt to the changing business conditions

ü  To access an outside provider’s expertise, innovative ideas and skills at low costs

ü  To be able to cut down on operational costs with enhanced performance

Key benefits of HRO

The benefits of outsourcing the human resource functions are many. The SME’s can invest in the latest technology and can redirect resources from non-core activities to functions of superior value. When organizations consider external help, they can access resources which are not available internally. As the company’s operational costs reduce they start gaining a competitive edge over the other players in the industry. On a concluding note,our final word is that HR outsourcing is one of the most powerful forces which can lead SME’s to greater profits and success. It is difficult for organizations to stay competitive in the fast changing global economy if they solely rely on their own resources.