Why Companies are choosing to Outsource their HR
The number of cases annually referred to the Employment Appeals Tribunal increased three fold during the Irish economic recession and the average compensation awarded by the Tribunal in Unfair Dismissal cases rose from €11,476.00 to €18,047.85 between 2009 and 2011. During this time of economic hardship Employers must pay even closer attention than ever before to their expenditure. Many organisations are forced to downsize and - in this era of increased Employee Litigation - making sure you follow appropriate procedures in redundancy or disciplinary scenarios, for example, is growing in importance. It is at times like these that Companies need to concentrate on their Human Resource functions even more. Some elements of HR, however, can be both complicated and time consuming – an enormous burden on Employers. In recent years the focus has moved towards legal compliance (which can be a minefield with all of the pieces of Employment Legislation currently in operation) and administrative processes that can slow down the productivity of the firm. For SMEs in particular, it makes a lot of business sense to outsource HR tasks as firms specialising in the field can improve efficiency dramatically. Outsourcing allows Companies to offload work that isn’t part of their core business. It also saves money. At a Company that doesn’t have the funds to hire specialists outsourcing can allow it to gain access to a vendor’s services when required as well as the expertise and wealth of experience that they have accumulated – all at an affordable price. While SMEs don’t have the same number of Employees as larger corporations and multinationals they still require the same HR elements on a smaller scale. For instance, they still need to recruit staff, they still need to abide by the vast array of Employment Laws and still require Employment Documentation (Contracts of Employment etc.).