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HR Administration – Why It Pays To Slow Down

(5-7 minute read)

Lively and energetic, hamsters never seem to slow down. Round and round they go on the hamster wheel, running tirelessly for miles on end. This scenario is similar to HR administration, where human resource professionals and decision makers are always on the go. From talent acquisition, compensation, employee benefits, performance management, health and safety, employee relations, records management to strategic planning, HR professionals have a plethora of responsibilities.

The downside of this hectic pace is that not enough time is devoted to strategic issues—like poor performance and employee turnover. Consequently, it’s important to slow the HR administration hamster wheel so you can focus on strategic matters. Here are two ways to achieve this.

Streamline Your HR and Payroll Processes

Both large and small businesses tend to view HR and payroll as separate organizational functions. HR deals with human capital management and payroll is about compensation. But, the two functions have so many interrelated components that business leaders are increasingly realizing the value of combining both processes into a unified system—such as via Software-as-a-Service (SaaS) HR technology, also called cloud (or web-based) HR software.

According to Ernst & Young, “the adoption of SaaS within HR is quite high, as 76% of the participating organizations already utilize some form of an HR SaaS solution.”

Non-integrated HR and payroll systems are a headache because the same information often has to be entered separately into both systems, increasing the chance of data entry errors. You could easily spend 50 percent of your time performing manual tasks and updating individual systems.

Conversely, an integrated system:

  • Reduces manual labor and paperwork
  • Decreases time spent on routine administrative tasks
  • Gives employees self-service access to payroll and benefits information
  • Helps you avoid penalties that may arise from noncompliance

By taking a holistic view of human resources, an integrated HR system improves efficiency, eliminates duplicate work, and reduces your stress level.

Consider Outsourcing

It wasn’t so long ago that the concept of outsourcing HR administration tasks was virtually unheard of. Nowadays, it’s practically a survival tactic for some of the most competitive businesses around. Per the Society for Human Resource Management (SHRM), outsourcing has become increasingly important as HR professionals look for ways to spend less time and resources on administration so they can focus more on strategic issues. However, the prospect of outsourcing should be carefully considered—because it involves not only what to outsource but also whether you should outsource at all.

For example, if you have an HR team and the right technology you can efficiently tackle HR administration tasks in-house—but that doesn’t necessarily mean this is the most cost-effective way of handling HR administration for your organization. In other words, although you are getting the job done, you could be saving money by outsourcing certain functions.

When deciding whether to outsource, it’s important to evaluate how the company currently delivers HR and whether outsourcing can help. Consider the following:

  • Will outsourcing disrupt the HR operation currently in place? If so, how?
  • Is HR fulfilling the organization’s needs?
  • Will top management support and pay for an outsourcing vendor?
  • Does the situation warrant outsourcing?
  • Will outsourcing improve productivity within the HR department? If so, how?

As for deciding what to outsource, this process has been complicated by the major shift in the role of HR. Traditionally, HR is viewed as a back-office function, where the department’s primary responsibility is to provide personnel support for front-end activities. However, industry experts are increasingly recognizing HR as a strategic business partner instead of simply a back-office function.

According to business consultant Evan Carmichael, “The HR is now strategically involved in profit making of an organization in a number ways,”—such as ensuring significant return on investment when hiring talent, negotiating employment contracts, creating retention policies, and dissuading employees from abusing the organization’s resources. This transformation in HR’s role makes it necessary to figure out which of HR’s many responsibilities should be performed in-house and which ones are better off outsourced.

Per SHRM, employers typically engage in selective outsourcing—which is the outsourcing of routine, transaction-oriented functions. Selective outsourcing is preferred because it can be tailored to fit the organization’s exact needs. Among the most common selective outsourced functions are payroll, employee benefits administration, compliance and risk management, training/management development programs, and background checks. It’s typically best not to outsource activities related to strategic, customer or financial management.

While outsourcing has its share of potential problems, the outlook is quite good from an HR perspective. In a 2015-2016 analysis, BNA Bloomberg reported that 66 percent of HR executives stated that their most recent outsourcing effort “met expectations” in key performance areas.

In conclusion, integrated technology and outsourcing are vital to slowing the HR administration hamster wheel so you can focus on strategic activities that drive business growth.




December 6, 2018




Article Business Executives Over 50 Employees Business Executives Under 50 Employees Competitive

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