When deciding whether it is a good idea for your company to outsource some or all of its HR functions, consider the reasons why other companies want HR outsourcing. This is especially true for highly specialized tasks within a company. A team of HR experts is well-versed in local laws and regulations. They also possess specialized knowledge and experience.
In this article, you will learn everything about HR outsourcing and its advantages. Let us observe:
1. An overview
2. HR outsourcing: What does it mean?
3. Who benefits from HR outsourcing?
4. Why do UAE companies outsource benefits administration?
5. The disadvantages of HR outsourcing
6. HR functions to outsource
7. How can Connect Group help you?
1. An overview
Growing businesses in the UAE face numerous challenges. This includes meeting customer demand, increasing production, recruiting and training workers, and remaining fully compliant with the country’s complex regulatory environment. It is especially difficult for a business to manage, especially when it is growing steadily.
Rather than maintaining and developing expertise in-house, some businesses choose to outsource employee benefits administration to outside specialists. Employers can help reduce costs while also ensuring legal compliance by outsourcing their HR functions. So, which HR functions should a company delegate to third-party service providers?
HR outsourcing in the UAE provides businesses with numerous options. When considering the functions that you want outsourced specialists to handle for you, consider the benefits that will set your company apart from the competition. What you want is for your HR outsourcing in the UAE to contribute to the expansion of your company’s goals and values.
Investigate the workforce trends that are currently gaining traction. Traditional benefits like life and health insurance are required, if not expected. Other voluntary benefits will set your company apart and serve as motivation for your employees.
2. HR outsourcing: What does it mean?
HR outsourcing is a contract in which a business owner hires a third-party company to manage some or all of the company’s human resources functions. Payroll processing, employee benefits administration, talent acquisition, and other services can all be outsourced.
2.1. Types of HR outsourcing
If you want to outsource your HR, you have two main options: HR outsourcing (HRO) or a PEO (personal employer organization). The services provided by each option heavily overlap; the only difference is how they are legally structured.
2.1.1. PEO
A Professional Employer Organization employs a co-employment model, which means that your employees will be listed on your PEO provider’s books for legal and tax purposes. However, you retain authority over your employees in terms of what they work on, whether they can be promoted or fired, and so on.
A PEO typically handles all of your human resources needs, though some providers allow you to pick and choose which services you want them to handle. The PEO bears the full legal and financial weight of all your company’s employment practices under this model.
2.1.2. HRO
Because an HRO does not use the co-employer model, your employees will remain on your company’s books and you will bear legal responsibility for their actions. The services that HR outsourcing companies provide are more flexible; you can outsource one or two tasks if that is all you need or all of them.
3. Who benefits from HR outsourcing?
In theory, HR outsourcing is available to any company that requires it. If you face the following challenges when handling HR tasks in-house, your company may benefit from HR outsourcing:
- Disproportionate time spent on HR tasks in comparison to other business needs.
- Prior or anticipated litigation or liability exposure.
- Inadequate funds to hire new employees or pay and cover benefits for in-house HR personnel.
- Human resources functions are distributed among employees from other departments.
- There are not enough in-house HR professionals to properly balance hiring and employee management.
Even if none of these apply to your company, you should consider outsourcing HR if it is too small to have an in-house HR team. You could benefit from outsourcing your HR if your company is not so large – say, not as big as a household-name department store – that its network of employee relations, variations in compensation rates, and several locations are difficult to explain to a company outsider.
4. Why do UAE companies outsource benefits administration?
A company’s HR department will have more time to focus on developing talent, supporting business goals, fostering a meaningful work culture, and other tasks by outsourcing benefits administration in UAE. When you delegate administrative tasks to HR, you may save money in the short term, but it can quickly become much more expensive in the long run.
Small and medium-sized businesses in the country are no longer hampered by their size. Employers will be able to access benefits that were previously only available to large multinational corporations by utilizing outsourced benefits administration in the UAE.
4.1. Expertise
A single person cannot have in-depth knowledge of all aspects of human resources. Employees you keep will appreciate the fact that they are working with experts who fully understand the complexities of industry changes, new and existing products, company processes, regulatory implications, and recommendations during emergencies or crises such as the coronavirus (COVID-19) pandemic.
Third-party benefits administrators can improve employees’ experiences with recommendations and insights by properly disseminating information about the full value of the company’s benefits programs.
4.2. Increased company workforce
To outsource HR administration to third parties may improve the company’s workforce. Companies report losing most of their top talent because most job seekers are looking for opportunities that not only pay well but also provide a long list of benefits. This is because they are unable to compete with other businesses.
According to a survey, 22% of SMEs in the UAE are losing talent because they cannot compete on benefits and compensation. With outsourced benefits administration in UAE, your company can offer much more appealing packages, such as training opportunities and various insurances.
HR outsourcing services also help to streamline the entire recruitment process. A company receives assistance in creating a more efficient and effective hiring process. It receives assurance that every aspect of the recruitment process, from the job description to the final interview process, is designed to attract only the best professionals.
There are service providers who can even help with the early stages of a hiring process, allowing a company to avoid the time-consuming process of sorting through a pool of applicants. It will be asked to participate only after the pool of candidates has been narrowed down to the candidates who have shown the most promise.
As soon as new employees are hired, the service provider can assist with the onboarding process. When a company has already defined the onboarding process, employees are more likely to successfully integrate into the company’s culture. It will be a huge help for people who want to get started right away.
This will also result in a significantly lower turnover rate. A third-party service provider can assist in the monitoring of employees’ performance as soon as they are established in their new positions. This translates to more time for company administration and objective insights.
4.3. Regulatory compliance is guaranteed
Compliance is one of the primary responsibilities of an outsourced HR team. Ensuring compliance, particularly for businesses in the UAE, can be a difficult and multifaceted task. Wage and employment laws are constantly changing. Companies must follow not only local laws but also federal regulations.
That does not even take into account the fact that companies will be fined if they violate labor laws. In addition, in this article, you will learn everything about the importance of outsourcing HR services in the UAE.
5. The disadvantages of HR outsourcing
5.1. It may appear impersonal
Some employees may find dealing with a third party for employee relations and performance management, particularly one located offsite, as HR outsourcing providers are, to be cold and impersonal. Some employers believe that hiring a small in-house HR staff to handle these needs is worthwhile to avoid a drop in employee satisfaction.
5.2. Corrections take more time
If an employee notices an error in their payroll, employees must contact their HR outsourcing companies and request the necessary changes. While sending a request may only take a few minutes, your HR firm may take longer to acknowledge your request due to the volume of clients it serves.
In-house HR staff, on the other hand, can most likely make these changes on the fly.
5.3. It poses recruitment difficulties
Although talent acquisition is one of many HR outsourcing services available, outsourcing your hiring process may present additional challenges. No matter how reputable an HR firm you choose, a third party will never understand your company culture as well as someone who works full-time in your office.
As a result, your HR firm may hire new employees who do not fit your company’s culture.
6. HR functions to outsource
6.1. Legal compliance
In the UAE, they always issue new legislations. This is why a company should have HR experts who help them to improve the company. If you ignore new legislation and regulations, your company can easily find itself in a big mess due to noncompliance.
6.2. Company policies and procedures
This is an outsized responsibility that you simply can delegate to HR professionals. The HR company that you simply hire must assist you in developing a collection of company policies and procedures. They are going to be included within the employee handbook. Whether or not there is just one employee, every business within the UAE, irrespective of size, requires a handbook.
The employee handbook should include policies on leave of absence, behavioral issues, performance management, sick and vacation time, and so on. Company policies and procedures provide consistency, allowing an employer to avoid making up rules as the business runs.
6.3. Employee training
The HR company that you hire must develop a handbook; in addition to that, they should assist with employee training. It is best to hire a reputable firm that has prior experience dealing with employees in your industry. When you combine new employee orientation with employee training, it works better.
6.4. Core values, vision, and mission
The CEO establishes his company’s core values, mission, and vision. However, an HR outsourcing firm can also assist you in determining your company’s goals and holding all employees accountable for meeting them.
6.5. Employer branding
It is the responsibility of an HR outsourcing firm to create a great brand for an employer. This includes activities such as:
- Checking in with current employees to ensure high employee morale.
- Improving and developing a productive working environment and employee culture.
Another aspect of employer branding that an HR outsourcing firm must deal with is promoting a company as the best employer for top talent.
6.6. Employee advocacy
Lastly, this is one of the key roles of an HR outsourcing firm. When team members come in to raise concerns, ask questions, or complain, the HR specialist you hire must be able to act as a neutral party.
A company’s HR department has to be effective in acting as a go-between, taking employee concerns to management and acting on behalf of the company administration.
7. How can Connect Group help you?
Now you are aware of the benefits of HR outsourcing. You as a CEO need HR outsourcing services to improve your company’s performance. And if you are looking for a company to assist you, we at Connect Group are your best option.
Our specialty is to make CEOs’ lives easier by providing them the assistance they need with their company in the UAE. We have about two decades in the market, making foreign investors happy. So, you will be able to enjoy our amazing HR outsourcing services.
Are you ready to take your HR department to the next level? Now, you need to contact us; so we will get you one of our best agents to answer all the questions you may have. If you prefer a traditional phone call, you can do it at +971 43 316 688; but we also suggest you to write to us via email at contact@connectgroup.co. Do you want to know more about the benefits of HR outsourcing?
In addition, visit our job seeking platform: thetalentpoint.com. There, you will be able to apply for one of the many jobs we are offering. We are looking for professional people like you to join us. Also, we will not store any information you share with us on contact@thetalentpoint.com.
