Human Resource Management: Outsourcing vs. Automation Software — Part One

The last few decades saw an enormous rise in outsourcing. Whether it was individual activities in a business process or entire business processes, many organizations have taken the outsourcing route. In the heydays of outsourcing, a simple rule of thumb seemed to be, if we don’t have the resources to do it, and if it is not a core function, let’s ship it off to someone else.

This however, was the case before the widespread proliferation of IT automation and SaaS. With software not being that cost-intensive to buy and not that effort-intensive to deploy and use anymore, the question to ask now is not whether it is a core function but if it cannot be managed in-house with a little help from SaaS and business process automation.

In this blog, we’ll make the case for using human resource management software instead of outsourcing the HRM function.

Best practices: One of the biggest cases for outsourcing was that organizations (especially smaller and medium ones) don’t have the wherewithal or the expertise to manage their HRM function with the same expertise they run their core business areas. They might not know how to recruit people, manage their records, or pay them periodically.

This point can be refuted easily as any online HR software solution is a collection of the best practices that any organizations can implement. Users will be able to implement any best practice they need.

Lack of resources or technical skills: This was another point favored by the evangelists of outsourcing. When a company does not have the resources or tools to manage its HRM function, they should outsource it. Once again a case can be made for online HR software.

As most of the system is automated and employees maintain their records themselves, the company does not need to invest in any manpower. All the HR representative needs to do now is to act more as a moderator and an administrator. He/she needs no great technical skills either. Simple computer literacy will do.

Please click here to go to the next part.

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