Which type of HR outsourcing company is right for you?

Improving your company’s operations will probably require special services, like HR outsourcing, which can provide you with many amazing advantages. However, before selecting an HR outsourcing services provider, it is important to know how to choose, while considering certain factors. The main aspect you must consider is your company’s requirements and the solutions you desire to obtain.

In this article, you will learn everything you need to know about HR outsourcing services in the United Arab Emirates. In this way, you can learn how to choose a suitable HR outsourcing company. Your business will be able to get the best solutions from an experienced services provider that fulfills its needs. Let us observe:

  1. What is HR outsourcing and what can it do for your company?
  2. How many types of HR outsourcing services providers can you find in the UAE?
  3. Which type of HR outsourcing services provider can best suit your company’s needs?
  4. How can a Professional Employer Organization (PEO) help you if you partner with them?
  5. What benefits can your company get if you get the services of an HRO agency?
  6. What are the differences between a PEO and an HRO agency in the UAE?
  7. Tips to learn how to choose between an HRO agency and a PEO
  8. How can Connect Resources help you get the most suitable HR outsourcing solutions?

1. What is HR outsourcing and what can it do for your company?

When a company needs to carry out HR tasks and increase efficiency and accuracy along with an expert team, they often look for HR outsourcing services. By outsourcing their HR functions, they leave these responsibilities in the hands of specialists who will ensure efficacy.

Besides handling HR functions on a company’s behalf, these services can also bring a lot of benefits related to legal compliance. If you implement HR outsourcing in your company, you can be sure that it will comply with all regulations and laws. At the same time, it can bring other benefits, including HR support and administrative relief, allowing you to focus on more important activities.

Furthermore, HR outsourcing is the perfect solution to support your HR needs in case you do not have a department in-house. Or, in case you already have an internal human resources department in your company, your services provider will work in conjunction with it. But it is important to learn about the different types of HR services available for your company.

2. How many types of HR outsourcing services providers can you find in the UAE?

In countries like the UAE, you will be able to find two main types of HR outsourcing services providers. One of them is known as Human Resource Outsourcer (HRO), while the second one is known as Professional Employer Organization (PEO). Both of these providers offer similar services; however, they cover different HR needs and provide different benefits for companies.

But before learning about their differences, similarities, services, and benefits, it is essential to know their concepts or definitions. Below, you will find more information about these two types of HR services providers:

2.1. What is a Human Resources Outsourcer (HRO)?

By getting the services of an HRO, you are making a contractual agreement with an external third party that will handle your HR responsibilities. In other words, you will transfer one or more functions related to the human resources area (payroll, recruitment, among others). Opting for getting these services is an ideal solution for companies that cannot appropriately manage these complex and time-consuming tasks.

Some of the HR functions that you can outsource to an HRO are these:

  • Tasks related to the recruitment process, training, and development.
  • An HRO will help you oversee organizational structure and staffing requirements too.
  • With an HRO, it is easier to track department objectives, strategies, and goals.
  • An HRO may also provide employee orientation programs.
  • HROs may be able to handle employee handbooks, policy documents, background checks, and more.
  • And when it comes to payroll and compensation management, an HRO can help you.

2.2. What is a Professional Employer Organization (PEO)?

Besides HR outsourcing, you can also choose a Professional Employer Organization to outsource your human resources functions and increase efficiency. Nevertheless, unlike an HRO, a PEO will work as a co-employer rather than an external third party that handles HR tasks. That is because PEOs work on a co-employment arrangement in which they serve as the employer of record for a company’s employees.

PEOs offer a wide range of services; they can take on essential HR functions as well as more comprehensive and strategic offerings. If you choose to work with a PEO to improve your company’s operations, you can transfer the following HR functions:

  • Payroll and compensation administration.
  • Payroll tax reporting and deposits.
  • Human resources management and support.
  • Payroll record management and maintenance.
  • Hiring and recruitment processes.
  • Legal advisory and compliance.
  • Unemployment claims administration.

On the other hand, you should also know that a PEO usually offers services tailored to your needs and requirements. It can also bring several benefits, like reducing your expenses and increasing your company’s productivity.

3. Which type of HR outsourcing services provider can best suit your company’s needs?

As you may know now, when it comes to HR outsourcing, both a PEO and an HRO can offer a variety of services. Choosing between these service providers can be confusing if you are not sure about their benefits, the cost of HR outsourcing, and other details. Besides, you also need to know that all associated costs can vary depending on the number of employees covered.

On the other hand, if you choose a PEO, you will get several advantages besides HR assistance with day-to-day operations. For example, you will also receive the guidance and support you need to make decisions more favorable strategically.

On the other hand, an HRO will probably only provide you with assistance in the tactical aspects of your HR management and administration. Please note that when we talk about the tactical aspects of HR administration, we refer to processes like payroll, time and attendance, etc.

4. How can a Professional Employer Organization (PEO) help you if you partner with them?

If you decide to get HR outsourcing services from a PEO, you will obtain a wide range of benefits. For example, your company will be able to save costs while getting better results in your HR operations. However, besides being a cost-effective solution, a PEO will be able to help you in many aspects, such as:

  • Creating new employee onboarding as well as state-wide training programs is easier with a PEO. It will help your company to reduce employee turnover significantly. In addition, it will lead to greater customer service continuity for your company’s clients, which also boosts engagement and renewals.
  • Since PEOs usually use online employee self-service portals, they can help your management team save time when fielding HR-related questions from your employees. As a result, there will be new opportunities to build relationships with customers, as well as pursue other profitable activities.
  • A PEO can help you find out whether you need full-time or part-time employees. Also, you will receive advice on your healthcare reform compliance.

5. What benefits can your company get if you get the services of an HRO agency?

Just like a PEO can help you improve your company, an HRO agency can also do it by providing HR outsourcing services and benefits. For example, one of the main advantages that you will get is reducing your company’s expenses since it will not need to hire HR-related employees. Besides, you will not need to organize training programs for new employees.

On the other hand, since HR specialists will handle your HR processes, there will be a significant reduction in errors. In case you desire to expand your business, an HRO agency will provide you with support to ensure full compliance with the local labor laws.

Lastly, your company can enjoy the benefit of keeping sensitive data secure. That is because HRO agencies use advanced security systems and software encryption to avoid information leaks or hacks.

6. What are the differences between a PEO and an HRO agency in the UAE?

As we mentioned before, there are two main types of HR outsourcing services that you are free to choose for your business. Even though these services are very similar, they have remarkable differences that you should be aware of. For instance, a PEO works on a co-employment model, while an HRO agency will only manage your HR functions as a third party.

Also, since PEOs work as co-employers, they take on all risks of their client companies and will be liable in case there is a tax audit. However, if you work with an HRO agency, you will be the one handling your company’s information and the agency will give you the documents you need. Other relevant differences between a PEO and an HRO agency can be their costs, benefits flexibility, and more.

7. Tips to learn how to choose between an HRO agency and a PEO

Besides learning about the differences between both types of HR outsourcing services, you should follow these tips as well:

  • Make sure to identify your company’s HR needs in order to find the most suitable solutions and HR outsourcing services. This will also ensure that your employees get better benefits and your business becomes more profitable in time.
  • Once you have checked what your company requires in order to improve HR processes, it is time to start searching for the best provider. The most effective methods you can use are pursuing a list of trade associations or asking for client references.

8. How can Connect Resources help you get the most suitable HR outsourcing solutions?

Any UAE company trying to grow and become more profitable should get appropriate services to boost HR operations in the short term. In case you need these services, our agency, Connect Resources, will provide you with an extensive range of options, including PEO and HRO solutions. However, remember that each option will cover different aspects, so your choice will depend on your company’s goals and needs.

For example, if you request our PEO services, we can handle all of your HR functions while you focus on your core activities. Additionally, our specialists will handle payroll tasks, visa, and immigration duties on your behalf.

On the other hand, we can also provide you with Human Resources outsourcing services, which can bring you similar benefits as PEO services.

Improving your company in all aspects is something that may require other HR services besides HR outsourcing. With us, Connect Resources, you can get the following services:

Do you need to outsource your HR functions to improve your company in the UAE? Get in touch with our team and we will find the best solutions for your business. To contact our best specialists, you can call us at +971 43 316 688 or send us an email at contact@connectresources.ae. In this way, you can let us know about your company’s needs and requirements, so we can offer you the most suitable services and solutions.

Would you like to apply for the best job offers in the UAE? Firstly, you will need to find the most exciting job opportunities by visiting thetalentpoint.com. On this site, you will be able to explore the most amazing employment vacancies from companies across the Middle East. Get in touch with The Talent Point‘s recruiters by sending an email to contact@thetalentpoint.com and submitting your resume.

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