Can we outsource Human Resources?

And should we do it?

Human Resources are two words representing a variety of meanings and roles. In its essence, a Human Resources department concerns itself with people management and development, and that includes talent acquisition, onboarding, salary processing, training, performance evaluation, team building organization, and even employer branding.

In its essence, a human resources department/people management group/people operations team (depending on how you want to call it) provides a 360º perspetive on the company and its team members, including their interactions, performances, careers, and expectations.

With that being said, I raise the question:

Can we — or should we — outsource HR tasks?

Outsourcing involves hiring the services of an external party to be responsible for certain activities. Accounting, IT services and content writing are some of the services most commonly outsourced by companies.

In human resources, however, it’s more common for us to see recruitment efforts and payroll tasks outsourced.

Outsourcing recruitment

A lot of companies don’t have the possibility to directly hire talent acquisition specialists, or they’re facing only seasonal hiring demands. There are a number of recruitment agencies out there who take care of everything connected to recruitment, from posting the job ad to interviewing several candidates.

Consultancy companies are also popular, especially when it comes to technology-related roles: essentially, they hire professionals who will then work on the projects of one or more clients. Those consultancy companies take care of the person’s contract, paid time off, or other benefits. In turn, their clients pay an hourly or daily fee for the employee’s services.

Whether this is a good or a bad thing is not an easy answer, as people’s opinion on this isn’t unanimous.

Some will argue that outsourcing employees will contribute to a disconnected sense of company culture, as team members are in and out of the company easily during a short period of time. Other people may insist that there’s a huge cost in hiring a permanent employee in a very volatile market.

When it comes to outsourcing recruitment, there are also pros and cons.

On the one hand, there’s no need for companies to hire recruiters (or to overload existent HR professionals) for complex and time-costing searches for talent. On the other hand, there’s a risk that external recruiters will not be up to speed on everything about the company they’re hiring, nor conveying the candidate experience that better represents the company (for better or worse).

Outsourcing Payroll, training, and administrative tasks

For other companies, it’s more difficult to have among their permanent employers poeple whose main skills is needed only when there’s a need to process salaries, or handle administrative tasks (such as creating accounts or managing paperwork). In this case, i’s easier to oursouce such tasks and guarantee the HR personnel frees their time for team engagement or development activities.

Training activities are not always seen as an HR department responsibility. In a lot of companies, HR professionals will outsource training initiatives by contacting schools and building partnerships. Most of the time, these institutions send a qualified teacher as a trainer for an organizing during a pre-defined amount of time.

This is particularly useful, given the multitude of technical skills people an (or want) to acquire in the workplace.

Outsourcing an HR department

A people management team is essential if you wish to have a department that’s fully centered in organizational culture and experience.

As stated previously, an HR department entails multiple responsibilities, assuming an essential role in an organization. Outsourcing a department with such focus on employees and in the company’s culture can contribute to a sense of detachment between team members and the company itself.

Without a group of people who can imparcially intervene in team conflicts and assessments, who will employees turn to?

A company’s culture is impacted and represented by every single team member. Nevertheless, a people management team will specifically look out for this, concerning themselves with how employees feel in the company, how the company is seen on the job market, and how team members are relating with one another.

We know that a coherent team, with a shared organizational culture, will guarantee higher team engagement and lower turnover rates. We can speculate that a department that’s fully concerned about this will contribute to this sense of coherence.

Can an outsourced HR team do this?

My answer: maybe not.

A people management group has to connect with the company’s team members, be aware of their concerns and objectives, and be aligned with the organization’s purpose and business goals. An external HR team might not be seen as a true member of the team, leading to mistrust among the rest of the company.

In Summary…

If the HR department is a team where business goals, organizational culture, and well-being come together, it should be a part of a company’s “heart and soul”, contributing to a sense of coherence and unity.

While some roles can be outsourced to save money and time (payroll, massive and/or seasonal recruitment efforts, administrative tasks, training), other tasks (performance evaluation, well-being assessment, employee follow-up, onboarding), given their direct impact on a company’s culture, are better off if performed by a cohesive and internal HR team.