Updated: Oct 27
The most valuable asset of a business is its workforce, and effective employee management practices have a significant impact on their daily experiences. However, not every Singaporean company is equipped to handle all aspects of staff management in-house. As a result, many organisations choose to outsource their human resource functions, which has been a popular practice for quite some time. Given the rising prevalence of HR outsourcing in Singapore, it is apparent that the strategy is here to stay.
HR outsourcing is a contractual agreement between a company and an external service provider in which the company transfers all or part of its human resources responsibilities to a third-party vendor. Some businesses will outsource all of their HR requirements, while others will outsource only the most complex tasks and perform the remaining HR operations in-house.
When HR functions are outsourced to an external service provider, certified HR professionals will manage everything from candidate sourcing and interviewing to employee onboarding and benefits administration. They would also adhere to labour laws and industry standards and deliver a hassle-free employment experience. These experts can also assist business owners in making more informed decisions. Outsourcing HR functions allows businesses to save time, cost, and various resources that would otherwise be spent on routine HR tasks.
To further understand how HR outsourcing in Singapore can help businesses, let us look at the HR functions that can be outsourced as well as the key benefits of outsourcing.
What HR Functions Can Be Outsourced?
Many human resource functions, from everyday administrative tasks to long-term strategic projects, can be easily outsourced. While they can vary depending on the company and its specific requirements, here are some of the most popular HR functions that are outsourced.
Employers and HR departments ensure that a business complies with all applicable employment laws and regulations. HR compliance entails a high level of expertise as well as an ongoing commitment to research and adaptation. Outsourcing this function to an external provider allows companies to acquire HR compliance guidance.
2. Employee Relations
In-house HR departments often handle internal complaints, employee concerns, and workplace conflicts. These are challenging and intricate situations that require effective mediation and, at times, policy changes to reflect staff concerns. Many HR outsourcing firms provide best-practice resources to assist with employee relations, claim handling, and crisis management.
3. Payroll Processing
A company cannot successfully function unless it provides comprehensive payroll processing services to its employees. Payroll processing, payroll tax filing, and remittance must be properly conducted to comply with the relevant laws and regulations. This function can be outsourced to an HR service provider for smooth and timely implementation.
4. Employee Benefits
Full-time employees often receive a variety of benefits as a part of their compensation. These include health insurance, retirement plans, and other non-traditional offerings, with a focus on inclusive benefits. An outsourcing company can assist businesses in gaining access to employee benefits that they are unable to provide otherwise.
5. Risk Management
When an employee gets injured on the job, the situation must be carefully addressed. Common workers' compensation issues include disability, paid sick leave, and emergency medical treatment. HR outsourcing in Singapore enables businesses to streamline these processes and minimise compensation issues in the event of an accident.
Why is HR Outsourcing Beneficial for Businesses?
1. Improves Workplace Efficiency
External service providers enable companies to enhance workplace efficiency by offering the latest HR tools and technologies to eliminate unnecessary processes. Therefore, outsourcing aids in optimising numerous HR functions as well as minimising the time spent on regular administrative tasks. It allows teams in the firm to focus more on core business operations, improving the overall productivity of the organisation.
2. Reduces Cost
Operating an in-house HR team can be expensive, particularly for small and medium-sized businesses with limited resources. Outsourcing partners often assist organisations in reducing their operating expenses by delivering efficient recruitment approaches that lower the cost of talent acquisition. They can also help with eliminating expenses related to the acquisition, implementation, and deployment of high-cost HR solutions.
3. Recruit and Retain Talent
Many organisations, particularly small firms and start-ups, face significant challenges in recruiting since they lack the brand recognition of larger corporations. HR outsourcing in Singapore enables companies to create a seamless workplace culture that will attract the ideal personnel. Moreover, a well-organised HR strategy improves employee satisfaction and retention, leading to low turnover.
4. Effective Risk Management
Similar to non-compliance with regulatory standards, workplace hazards can also tarnish the reputation of a company. HR outsourcing providers are often experienced in dealing with complicated workplace issues. Therefore, they can assist organisations in reducing workplace risks while enhancing the public image of the company.
5. Performance Management
Employee performance management has become a vital component for any employer as annual reviews, salary negotiations, and other performance-related discussions are unavoidable in business. When working with a company that outsources HR services in Singapore, employers gain access to a variety of performance management solutions. The agency can also assist with setting performance goals.
FK Human Resources – Your Trusted Partner in HR Outsourcing in Singapore
Are you searching for a reputable recruitment agency in Singapore that provides HR outsourcing services? Then look no further than FK Human Resources. Our service offerings extend from consultation and candidate sourcing to interviews and employee training. We have over a decade of experience in the recruitment industry and are renowned for our professional HR services and exceptional customer care. Our team provides holistic solutions for your HR outsourcing requirements and is available around the clock for your convenience. Get in touch with us at +65 6749 9849, and let us guide you through the process of HR outsourcing!