Benefits of HR Outsourcing in International Locations

HR outsourcing is often an ideal solution for companies wanting to tap into the markets in an international location.

Proper human resource management always plays a critical role in company success, but especially when a business operates abroad. The complexity and scope of HR functions such as payroll, recruiting, and compliance magnify when a business operates beyond borders.

The following benefits of human resources outsourcing services positively impact your bottom line and improve operational efficiency.

Cost Savings

Analyzing the cost of performing HR services in-house usually includes calculations for back office expenses. These might include labor for well-trained, experienced HR staff, equipment and upgrades, office space, and overhead.

However, many businesses don’t realize the financial burden is actually much higher. Even if they feel they can justify the cost, they may actually grossly underestimate how much they’re actually paying.

According to “The Hidden Reality of Payroll & HR Administration Costs” research study by PwC, hidden costs not included in typical calculations account for 51% of total costs.

Hidden costs include items such as indirect labor costs for preparing employee hours for payroll and distributing checks. They also include direct non-labor costs for IT staff, systems maintenance, vendor fees, and consultants.

As a result, it costs a small- to medium-sized business nearly $2,000 per employee per year to administer payroll and other HR tasks in-house. HR outsourcing services can provide a return on investment that far outweighs the cost of the service.

Regional Expertise

HR outsourcing is an excellent choice when operating in an international location. In-country experts are attuned to cultural norms and communicate in the languages of the region.

They’re well-versed in the legal, accounting, payroll, and tax compliance requirements for the locale, region, and nation. They also monitor regulatory updates, decipher complex labor laws, and ensure your business fulfills recordkeeping demands.

A good HR firm also maintains and audits your company policies and practices to ensure company and employee protection. They also provide in-depth reporting for better insight into company performance.

HR Outsourcing Improves Efficiency

HR encompasses many tasks relating to the people within your business. Unfortunately, not all these tasks provide strategic value to your company.

For instance, regulatory compliance is a critical function that requires constant attention. Many companies don’t have the time or expertise to manage it properly.

Process-driven tasks such as payroll are well-suited to outsourcing. Payroll outsourcing services free up time for critical core competencies, strategic development, and business growth.

According to TotalJobs.com data, HR personnel spend very little time on the tasks that strengthen and grow your business. Recruiting, onboarding, managing personnel, and developing an HR strategy are often overshadowed by administrative tasks and meetings.

HR outsourcing provides quality process-driven services more efficiently and with a faster turnaround time. It allows your business to enjoy the many benefits of starting a business overseas.

Better Personnel

Since HR personnel have little time to devote to the recruitment and hiring process, it often doesn’t receive the attention it deserves. However, a company’s human resources should be one of its greatest assets and human capital is vital to success.

Hiring and training staff is also a costly and time-consuming venture. According to the Society for Human Resource Management, the average cost-per-hire in 2016 was $4,129. It also takes an average of 42 days to fill a position. However, most companies are eager to start earning in their new territory.

Companies that choose to partner with a professional HR outsourcing firm benefit from a dedicated staff solely focused on the hiring process. This typically means accessing better personnel quicker.

A good HR outsourcing service streamlines the hiring to ensure every aspect of the process attracts top talent. From the initial job description through interviewing and hiring, they align expectations with qualifications and experience. They can also define a consistent onboarding process to assimilate new personnel quickly for greater efficiency.

Improved Performance

HR outsourcing can also help companies manage employee performance. The HR outsourcing company implements a performance management plan, offers objective insights, and frees up HR time for strategic initiatives.

Additionally, they ensure employees comply with company policies and procedures and meet your business goals. HR outsourcing services also rely on the latest methodologies, technology and processes to ensure tax and regulatory compliance.

HR outsourcing also focuses on client satisfaction and business-centric strategies. Companies can expect efficiency-driven results and high-value services.

Single Contact Point

HR outsourcing companies offer the additional benefit of a single point of contact for multiple processes. For instance, your company can connect with one HR outsourcing company for payroll, international business advice, recruitment, and compliance. Your company manages challenges, risks, and operations without unneeded complications.

Everything’s delivered through a single point of contact. For instance, the HR outsourcing company can handle payroll, withholdings, tax payments and reporting, compliance, and employee queries.

Highly-Flexible Solution

HR outsourcing is a mature, widely accepted management tool which offers great value. It is a proven method which addresses skill shortages and allows business to scale operations up or down whenever needed.

Relying on HR outsourcing also supports major restructuring efforts and helps companies better evaluate operations to target areas that require improvement. Streamlined, standardized, and fully functional HR functions easily adapt with your business as it changes and grows.

Better Financial Control

Outsourced payroll and accounting services provide in-depth reporting so companies are better able to manage cash flow and their operating budget. Relying on a top-notch HR outsourcing service also means expert advice and cost savings recommendations.

Operating in a foreign market requires expert guidance and streamlined processes for increased revenue growth and international success. Partner with a global leader and gain insights into your new market with less expense and risk.

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Blueback Global is your international business expansion expert. We offer HR functions including payroll outsourcing, accounting and reporting, statutory compliance, international business advice, immigration support, recruitment and hiring, and more.

With a network of global professionals each with regional knowledge and local business savvy, we simplify global expansion. We’re well-positioned, highly-experienced, and can help you overcome your multinational business challenges.