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The role of outsourcing within HR continues to evolve. As some outsourced services diminish, such as recruitment agencies, another one rises: the flat-fee recruitment model.

The rise of outsourcing

The UK human resources industry began outsourcing HR systems and processes in the mid 1980’s and since then outsourcing, as an industry in its own right, has developed at a steady pace.

Outsourcing within HR has traditionally been associated with recruitment agencies. However the development of the industry has lead to a number of new services being offered, such as online advertising and CV sifting, training and development, redundancy planning and numerous others.

The development of the internet has played a large part in the progress of the HR industry throughout the past few years and has helped develop the outsourcing industry. Online access has allowed many previously time consuming HR tasks, such as recruitment advertising and candidate response management, to be completed either automatically, or outsourced.

HR and the internet

Developments in technology continue to save human resources managers a great deal of time as many HR tasks can be completed more efficiently. 

Efficiency within HR departments has also improved as the speed of delivery of HR services increases.

Arguably one of the most interesting areas of the HR outsourcing industry to develop has been recruitment. Up until recently, many recruitment agencies would charge a fee of around 20% of a candidate’s salary for successfully filling a vacancy.

With the development of the internet the recruitment agency market is quickly declining. With several well known recruitment agencies having gone out of business within the past six-to-twelve months, many experts predict that others will follow as the industry looks for lower cost and higher returns, in order to fill vacancies.

The pros and cons of outsourcing

Despite the time and cost savings associated with outsourcing, the industry does have its critics. Research has shown that the primary concern raised by HR managers against outsourcing is ‘a lack of control’.

While in some respects this argument carries a significant amount of weight, many outsourcing experts counter this with a belief that human resources managers should focus on the areas they add greatest value to within an organisation, such as training and mentoring staff, focusing on employee retention and internal communications, and by releasing control of non-essential tasks, will increase departmental productivity.

By focusing on non-essential tasks, such as recruitment advertising and first stage CV sifting, many HR professionals are using valuable time carrying out tasks that could be outsourced to a specialist, saving overstretched HR teams’ valuable time and effort.

Outsourcing recruitment advertising

Although numerous other areas of human resources management have also been outsourced, the development of a ‘flat fee recruitment’ model whereby the recruiter will advertise an employer’s role on a number of online job boards, filter the response through and provide a selection of suitable candidates to choose from for a low-cost fixed fee, has been by far the most popular and successful.

The popularity of the ‘flat fee recruitment’ model has proven popular due to a number of reasons, such as the removal of highly administrative tasks from HR departments.

Countering the ‘lack of control’ argument is the fact that the employer retains control of the process, i.e. they still look after the interview/start process for all new staff. This allows the employer to gain many of the Benefits of using a traditional agency, whilst facing only a fraction of the typical cost. 

Outsourcing as a valuable solution

Outsourcing is deeply engrained within the UK human resources market. As the industry has grown and new media technology has developed, innovative and modern outsourcing solutions have emerged and older business models have faded.

Current market conditions have left many HR departments facing unprecedented Challenges, such as dealing with the quantity of applications for vacancies, while struggling to meet the internal Challenges their own organisations face.

As the UK economy heads further into recession and many companies halt investment in new services, outsourcing must continue to prove itself as a valuable solution capable of delivering a return-on-investment as well as adding specialist skills/experience to HR departments during times of need.

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