HR Outsourcing (known as HRO) is the process of sub-contracting human resources functions to an external supplier to reduce costs and nonessential staff head counts. Reviews of business costs and processes have led many organisations to sub-contract some or all non-core HR and Talent Acquisition activities to specialist providers.
Whether partially or complete outsourcing, companies frequently outsource the following HR functions:
- Talent Acquisition (Often via Headhunting Agencies)
- Background Reference Checks & Screening
- Payroll Management & Tax Filing
- Professional Skills Training & CPT Tracking
- Temporary Staffing Needs
- Employee Assistance/Counselling
- Compensation, Fringe & Health Care Benefits Provision
- Retirement Planning, Relocation & Retrenchment
- Performance Management & Disciplinary Matters
Other Types of HR (and Business Processes) Outsourcing:
Business Process Outsourcing (BPO)
- Visa & Relocation Advisory
- Market Intelligence / Salary Bench-Marking
- Employee Rules & Handbook Compilation
- Staff Onboarding & Orientation
- PEO & ASO Services: “Professional Employer Outsourcing” & “Administrative Services Outsourcing”*
* Business, HR and related back-office administration or other non-core back office functions are outsourced to “PEO” or “ASO” Firms. An “ASO” or Administrative Services Organization is also often known as a Payroll Management Services Organisation (PMSO). The most significant difference between an ASO/ PMSO and a PEO is that the service provided through an ASO/ PMSO does not establish a company/employer relationship with the employees. Whereas PEOs actually employ the employees directly and then second these employees back to the Client on an agreed fees/ contractual terms basis.
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