A proven strategy among businesses is to contract out your specific HR functions and tasks to external HR outsourcing companies in UAE. This strategy saves costs, improves efficiency and provides them with access to specialized expertise.
We have written this piece to have a detailed discussion on what is outsourcing in human resources. We also shed some light on the main types of HR outsourcing.
What human resources functions are commonly outsourced?
When outsourcing human resources, there are some of the functions that are most often outsourced than others. These are some of the services usually delegated to HR outsourcing companies in UAE.
Recruitment and Staffing
For hiring, screening, and onboarding new employees, HR outsourcing Dubai is an effective solution.
Payroll Processing
For managing employee salaries, benefits, and taxes.
Benefits Administration
For managing employee benefits programs. This includes health insurance, retirement plans and time off.
Employee Relations
Handling employee grievances, conflicts, and disciplinary actions is another major outsourced function.
Training and Development
Designing, implementing, and managing employee training programs is outsourced to service providers.
Performance Management:
Conducting performance reviews, setting goals, and providing feedback.
Talent Acquisition
Sourcing and attracting top talent for the organization falls onto the provider during HR outsourcing Dubai.
These functions are often outsourced because they are time-consuming. They require specialized expertise. These can be subject to fluctuations in workload as well. When organizations outsource these HR tasks, they are able to focus more on their core competencies. It improves their efficiency too.
Administration
The specific tasks involved in administration vary among companies. Many HR departments handle administrative duties. These involve:
Employee Data Management
HR outsourcing service providers maintain accurate records of employee information. This includes their contact details, employment history, and benefits.
Onboarding and Offboarding
They manage the processes of welcoming new employees and assisting departing employees.
Time and Attendance Tracking
One of the outsourced functions is monitoring employee hours worked and their absences.
Benefits Enrollment
HR outsourcing providers assist employees in selecting and enrolling in benefits programs.
Compliance Management
They ensure compliance with employment laws and regulations.
HR Reporting
The HR outsourcing companies in UAE generate reports on various HR metrics. These encompass the following metrics
- turnover rates
- employee satisfaction
- diversity and inclusion
Administrative tasks are time-consuming and resource-intensive. Outsourcing them to a specialized HR service provider means you can free up your internal HR staff. This enables them to focus on more strategic and value-added activities.
Payroll management
Payroll processing involves a complex range of tasks. We break these down in detail.
Calculating wages and salaries
Determining employee pay based on hourly rates, salaries, commissions, or bonuses is part of the outsourced payroll management..
Withholding taxes
You delegate the calculating and withholding federal, state, and local income taxes, as well as other taxes such as Social Security and Medicare taxes.
Managing benefits
Companies outsource tracking and processing employee benefits. These consist of
- health insurance
- retirement plans
- paid time off
Generating reports
HR outsourcing companies in UAE prepare payroll reports for companies.
Compliance
With delegating the HR tasks, companies ensure compliance with UAE’s regulations and labor laws. This encompasses:
- minimum wage
- overtime rules
- equal pay laws
Compliance and risk management
HR outsourcing organizations make sure your business is in compliance with the relevant laws and industry standards. They prevent any violations of regulations. Companies outsourcing this major function of compliance and risk management have an extra layer of safety. It protects them from legal consequences and labor disputes.
Compliance
Employment laws
Compliance with labor laws, minimum wage regulations, and equal opportunity laws is ensured.
Data privacy
Employee data is protected. The data privacy regulations of the country are adhered to when you outsource these functions.
Immigration laws
Compliance with immigration regulations for foreign workers is guaranteed.
Risk management
It involves identifying, assessing and eliminating any potential risks. Ones that could otherwise negatively impact the organization’s HR functions. This includes areas such as:
- Employee misconduct
- Workplace accidents
- Legal disputes
Recruitment services
There are different types of recruitment services that can be outsourced.
Full-cycle recruitment
The provider handles the entire recruitment process. They manage everything, be it job posting or onboarding.
Contingency recruitment
The HR outsourcing Dubai company is paid a fee only if they successfully place a candidate.
Retained search
For filling a specific role, the agency is hired on a retainer basis.
Executive search
The company specializes in recruiting high-level executives and senior management positions.
What are the main types of HR Outsourcing
HR outsourcing can be categorized into several primary types. Each of these offer their own distinct advantages and considerations.
Full-Service Outsourcing (FSO)
Companies entrust all HR functions to an external provider. The benefits include comprehensive coverage, cost-effectiveness, and access to specialized expertise. A consideration over this is potential loss of control over HR processes. There might be data security concerns too.
Selective Outsourcing
In this type, specific HR functions are outsourced. These include payroll, benefits, administration and recruitment. The benefits of selective outsourcing consist of the offered flexibility, affordability and ability to address specific needs of a business. It however requires careful coordination and integration with your internal teams.
Project-Based Outsourcing
When you engage an external provider for temporary and project specific HR tasks, it’s project based outsourcing. The advantages it provides includes scalability and economic solutions for short term needs.it requires clear project scope and timelines though.
Shared Services
This type means sharing HR resources and services across different organizations. It requires coordination and communication among participating entities. It is advantageous as it standardizes many HR practices.
Other types of HR outsourcing Dubai include onshore outsourcing, offshore outsourcing and near shore outsourcing.
PEO
It stands for Professional Employer Organization. It’s a type of HR outsourcing model. This is when an external company acts as the employer of record for your employees. This means the PEO assumes the administrative responsibilities of being the employer.
How PEOs Work
- You enter into a co-employment agreement with the PEO.
- Your employees become employees of the PEO for administrative purposes.
- PEO handles tasks like payroll, benefits administration, and compliance.
- You maintain a direct relationship with your employees.
Business Process Outsourcing (BPO’s)
Outsourcing any business process regardless of its function is BPO. It includes HR functions too. In response to what is outsourcing in human resources, HR outsourcing is a subset of BPO. Types of BPO consist of:
- Back-office outsourcing
- Front-office outsourcing
- Knowledge process outsourcing
- IT enabled services outsourcing
Application service providers (ASP’s)
In this type of outsourcing model, a third-party provider delivers software applications to clients over the internet. These are usually through a subscription-based model. ASPs are not specifically HR-focused. They can still play a pretty major role in HR outsourcing.
How ASPs Relate to HR Outsourcing
HR Software
ASPs provide HR software applications as a service. This consists of
- payroll systems
- applicant tracking systems
- performance management tools
Cloud-Based HR
ASPs often deliver these applications through the cloud. This makes them accessible from anywhere with an internet connection.
ASPs have the expertise in implementing and managing HR software. Using ASPs reduces upfront expenses associated with purchasing and maintaining software. They easily scale their services to meet the changing needs of your business.
E-services
Delivering services over the internet is e-services. In the context of what is outsourcing in Human Resources, e-services have a huge role in providing several HR functions.
These are the common e-Services in HR outsourcing.
- Payroll Processing
- Applicant Tracking Systems
- Performance Management Systems
- Time and Attendance Tracking
- Learning Management Systems
- Benefits Administration
What are the strategies of HR Outsourcing
For maximizing the benefits and minimizing the associated risks, it is important to implement some well-planned strategies.
- Define your clear objective
- Negotiate a strong contract
- Consider hybrid approaches
- Evaluate the success of your outsourcing arrangement
- Conduct regular reviews and make necessary adjustments
How HR Outsourcing can benefit your business in Dubai
After you are familiar with what is outsourcing in human resources, it’s time to consider the various benefits. With how important the HR outsourcing Dubai is, it’s bound to have some impressive advantages.
Outsourcing your in-house HR department or delegating their specific functions saves overhead costs. It provides you with flexible and scalable solutions adaptable to your changing requirements. They minimize any risks and ensure compliance with UAE’s laws. To make it all more lucrative, your company gets access to specialized expertise. They have deep local knowledge as well as the cultural insights and nuances.
We redefine what is outsourcing in human resources—contact Connect Resources for our services of HR outsourcing.
