• Highly administrative: Estimates vary, but many HR professionals can spend up to 40% of their working hours¹ (link resides outside ibm.com) on administrative tasks. This time-consuming work keeps them from more important, higher-level tasks that produce more value for the organization. Outsourcing HR functions that are mostly administrative creates space for HR professionals to focus on working directly with employees in more direct ways.
• Cost-effective: An organization should consider outsourcing any tasks that will be cheaper for a third-party provider to do without sacrificing the quality of service. Organizations should know the relative cost in time and resources for an internal person to perform a task and compare it to the cost of outsourcing or automating.
• Automated: Some HR processes are easily automated, like benefits administration; others, like talent development, require a human touch. Identifying the activities that provide the same quality of care as automated or not is a good recipe for deciding which ones they should outsource.

Organizations should identify which tasks the in-house HR team should manage and which they should outsource. In general, there are several administrative tasks related to the HR function that organizations often prefer external parties to handle.

• Benefits administration: This is a highly administrative process that often involves following straightforward rules. Employees need to provide certain documents and identification for employee benefit enrollment. As such, it is highly desirable as an outsourced activity.
• Recruitment: Organizations can combine both outsourcing and AI in recruitment activities to minimize time-to-hire and increase success rates. However, organizations must prioritize expanding the pool of potential candidates in all their hiring activities. They should communicate their goals to outsourced providers so those partners can create accurate job descriptions and find the right candidates. That enables internal employees to prioritize interviews with key candidates.
• Applicant tracking: Organizations, especially larger ones, can have hundreds or thousands of open positions and candidates at various stages in the recruitment process. Internal HR teams are not necessarily the right resource to track this. It’s better to use automated software or external parties to manage that process, and include internal HR employees when they need to interview, make an offer or troubleshoot.
• Employee handbook execution: Outsourcing the creation and maintenance of an employee handbook removes a labor-intensive activity from the responsibilities of HR representatives. The internal teams can set the outline and strategy for the book, then outsourced representatives can enter the details, sending it back to the internal team for final editing.
• Compensation and payroll processing: This is a laborious activity that ensures employees are paid on time and correctly. Outsourcing payroll administration can ensure greater compliance and expediency of core components like payroll tax filing and workers' compensation claims.
• Employee onboarding: Organizations can outsource many components of the employee onboarding process, such as collecting employee information, setting up company resources and collecting feedback.
• Performance management: This refers to the work of communicating job responsibilities and expectations, and helping employees achieve their goals. While the internal HR team sets the strategy, the outsourced resources can manage the day-to-day responsibilities.
• Workplace safety and risk management: These are labor-intensive, but necessary tasks that an outsourced partner with ample experience can handle with ease. A trusted partner can manage risk issues like safety instructions, compliance and legal liabilities issues so HR representatives can focus on other issues.

Having successfully outsourced several non-core activities, HR teams can devote their attention to some other important issues.

• Talent acquisition strategy: In general, HR executives should spend most of their time setting the strategy for talent acquisition. This includes determining how they should position the company, what the process should be for recruitment and hiring and how to use employees to recruit from their network. As with other processes, the organization can then outsource some of the more administrative tasks.
• Achieving diversity, equity and inclusion (DE&I) goals: The goal of HR outsourcing is to free HR executives to focus on difficult decisions. Nearly every organization is trying to meet established DE&I goals, which require innovative approaches to corporate messaging, the recruitment process, employee retention and other areas.
• Improving training development: Organizations need to constantly improve their training approach to keep up with trends and new developments, especially with the rise of artificial intelligence (AI). By focusing on training and development program creation, organizations can teach employees new skill sets or enhance their skills to better serve the business. In addition, this helps progress employee careers, which in turn improves employee satisfaction.
• Enhancing talent development: Spending time with employees and helping them better manage their expertise and workloads is another key internal activity. HR professionals should focus on creating an ideal structure for talent development, such as teaching soft skills and helping employees understand best practices for their jobs, while potentially outsourcing specific tasks.
• Analyzing employee data: Organizations want to manage employee data internally for security reasons and for the value it can provide to the entire business. Understanding efficiency and productivity stats—and where employees are falling short—is a great way to highlight how the organization can improve.