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An Overview of HR Outsourcing in Business (Human Resources Management)

The trend in the business world is now getting more and more into a more flexible way of dealing with the market. Instead of continuously producing products which lead to an additional expense because of the carrying costs of the surplus in their products, businesses are now beginning to shift their ways into producing more or producing less depending on the demand for their product.

The same principle is also now beginning to be applied on the service rendering sector. This shift in the trends can be clearly evidenced by the use of new inventory systems such as the Just-In-Time (JIT) system and the two-bin system. Both of these have led to a successful reduction in the costs incurred by the businesses employing them. Now, this trend in inventory has also made its way in the other areas of a business particularly in the area of human resources, and in the business, we call it “HR outsourcing.”

As its name implies, HR outsourcing involves the getting of human resources from outside third party sources. Whether your business is involved in manufacturing, merchandising, or service rendering, there would be agencies in your country that can provide your specified need for HR outsourcing.

By outsourcing your human resources, your business will now be able to focus more on the main line of business. Take for example when your business has the manufacturing of baskets as its main revenue-generating operation. However, this business not only requires the manufacturing of baskets and then selling them, your business may also require taking orders in bulk, custom-tailored baskets, and the distribution of these baskets on retailers and consignees.

This aspect of the business doesn’t require your training and HR management anymore; you can hire the employees needed for this job from an HR outsourcing agency. By doing that, the additional expenditures that you could have used in hiring new employees such as screening, training, and interviewing them, will now be used on improving the quality of your employees in the main operation which is the manufacturing of the baskets.

HR outsourcing, like the JIT system, can also be very beneficial in increasing the flexibility of your business against the constantly changing – whether projected or sudden – demand for your business. For example, your business is a catering service where function rooms could be involved and you accommodate un-booked arrival in the function rooms. This mode of business requires the preparation for waiters that are waiting in line to accommodate new guests. Based on the past records of the business, the demand for un-booked arrival of visitors have a huge decline during June to October so having many waiters waiting in line will only cost you more without having any returns. If you have employed these waiters through an HR outsourcing agency, you can temporarily lay them off back to the agency and have them back again by the time that the expected increase in demand has come. Such a flexibility in demand and reduction in costs can be obtained through HR outsourcing.

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