Long gone are the days when the human resource manager’s task was just limited to performing recruitment related tasks. Today, the HR managers are even taking part in the strategic decision making of the organization, and it is to that extent the HR field has gained scope.
As the scope widens, so are the responsibilities of the HR manager. The increase in expectations for this field has led both the organization and the candidate (HR manager) to think of other possible options. And they are either OUtsourcing HR functions or implementing digital solutions.
Outsourcing HR Or Digital? Which Is Best?
The rise of the question – “How to discern between the two options?” is obvious. And it is absolutely right to question, think, request suggestions, etc., before making a choice. If not, regretting the choice later out of the consequences is of no use.
Therefore, understanding the clashes of opinions and confusions that arise to make the right choice, I have listed few important aspects and compared the two options. I hope this might be a help to you. Shall we go ahead?
No wonder when a company outsources its HR functions, they have more time to focus on the business’s strategic aspects. But when looked into it deeply, there is the time involved sorting out queries, processing the payroll (which by itself is tedious), documentation, etc. And apart from it, imagine a simple example that’s quite common, the request for a payslip from an employee. The outsourced consultancy work is based on priorities. Thus, it sure is too time-consuming.
Again when we take into consideration the time factor and compare digital solutions to outsourced HR, well, the answer is already at the tip of your lips. Isn’t it? The time saved with the help of digital solutions is tremendous. Almost all the tasks (which include payroll) can be completed within minutes, just with a few clicks. And as mentioned earlier, the employees can do certain things on their own, saving the time of the manager. Thus, the overall time spent by the organization can be efficiently managed.
Be it any business, the cost and revenue are the most significant aspects for the entrepreneurs. When we discuss costs incurred in outsourcing, many might say that it is cost-effective, whereas they fail to understand the recurring expenses involved in outsourcing the HR practices.
When we compare HR outsourcing to digital HR in a similar context, the major advantage is that the earlier one’s limitation is overcome by the latter. There are absolutely no recurring costs involved. Indeed, the initial implementation cost of the HR management software solution (which will also vary according to different vendors) may seem higher compared to outsourcing. However, the entrepreneurs who can discern well are sure to look at the benefits in the longer run.
Security Of Data
No doubt, when the contract is made between the company and the HR outsourcing consultancy, there are many documents along with which a non-disclosure agreement is signed. Though not intentionally, there are high risks of data theft and loss, including natural disasters. It is all based on trust. If your contractor keeps up to your trust, well and good. But what if not? Wouldn’t it be too late to think of after the unexpected happens?
Whereas, with the implementation of the software, even natural disasters cannot affect the data as they are stored on the cloud and are highly secured. It sure has security options such as passwords and so on that limits access to the unknown person. However, while choosing a software, all you need to make sure is that the software has cloud computing capability.
Improvement In Recruitment
Indeed, the outsourcing consultancy for human resource functions will include experts and professionals. However, it is crucial to understand the battle that exists for qualified and talented recruits among businesses. Obviously, the professional tries the best to make justice to the profession. Still, there are chances of overlooking certain aspects due to limited sources of resume or a tendency of being biased.
But then, when compared to digital solutions, there is absolutely no room for biases, and there is a thorough and complete check right from the pre-selection process to the retirement of the employee. That too, all on a single platform. Doesn’t it sound great? Added to this, digital HR also provides mobile solutions and AI-based tools that enhance the user experience. A report named Undercover Recruiter, released in the year 2018, predicts that in the next 10 years, AI is likely to take over 16% of the HR tasks when it comes to recruitments.
Employee engagement has caught hold of a prominent place in the organizations, unlike earlier. The significance is to that extent, be it purchasing machinery or framing policies for the company, the major concern is whether it engages the employees or not. And similarly, when we talk about the outsourcing of HR, it hardly contributes to employee engagement as it rarely has anything to do with the employees. In contrast, all the functions are performed by a third party company or individual.
Transforming the human resource from traditional practices to digital practices provides an opportunity for a lot of employees’ involvement. It is so because the employees don’t feel left out. This involvement engages in many ways, especially with the availability of mobile-based solutions, such as they can check and generate the payslip on their own, apply and check the status of leave or attendance application, etc. Thus, minor or major, there is a chance for them to participate in something as employees and drastically reduces their dependency on the human resource managers.
With reference to all the factors discussed, no doubt, choosing digital HR is the right choice for efficient functioning. Note that for an organization to stay connected with the technological trend, is more of a need than just a want. I have presented an image below that clearly shows the graphical representation of the benefits of HR digitization.
Well, as we approach the end of the article, I hope there’s clarity for making the right choice. In simple words, outsourcing consultancies focus on increasing their client base, which is not at all wrong as it is their domain. But when it comes to prioritizing tasks, it might not always be you as you wouldn’t be their only client. So why not adapt to the one that entirely focuses on your requirements and organization’s development? Think about it.