HR outsourcing

5 Myths & Misconceptions about HR Outsourcing

July 12, 2022

Outsourcing has grown in importance as HR professionals look for ways to optimise and streamline their tasks. Payroll, benefits administration, and other operations are frequently delegated to outsourced partners while internal HR teams focus on talent management, recruiting, succession planning and other key roles. 

Additionally, other than allowing in-house HR employees to concentrate more on strategy, outsourcing can: 

  • Give businesses access to specialised HR knowledge 
  • Provide support for regulatory compliance
  • Save valuable time for HR transactional tasks like payroll and benefits enrollment.  


There are also advantages in terms of technology when outsourcing your HR tasks. Employers can benefit from cutting-edge software systems to gather insights about their workforce and reduce errors through automation. 

There are a lot of benefits to outsourcing human resources. Despite this, there are some reservations about getting started with outsourcing. Therefore, let us look into some of the misconceptions about HR outsourcing.  


Myths and Misconceptions about HR Outsourcing 

Here, we will try to debunk some of the misconceptions about outsourcing your human resource activities:

  • HR outsourcing will cause a loss of control of your business  

Some would have thought that outsourcing will make them lose their authority and control over their department and business. This can happen because of the assumption that outsourced staff are not obliged by the rules and regulations of the client’s company. 

In actuality, outsourcing clients will still retain their core responsibilities as the head of the company or department. They are in charge of their employees’ growth and overall performance. Outsourcing certain redundant tasks such as payroll or claims do not necessarily result in loss of control, especially when working with the right firm. 

Outsourced firms are meant to help your department and are thus obliged to follow the guidelines and standards of the client’s company. To reduce the concern of losing control, both parties must maintain good communication so that your objectives are consistently met. 

  • Outsourcing is an unnecessary expenditure  

Is it true that hiring an outsourced HR partner will cost a lot more than managing everything in-house? The answer might depend on how you choose your outsourcing partner, what your outsourcing objectives are, and how it will be handled. Getting the right firm to work with ensures HR services can be done efficiently and cost-effectively. It is perhaps better to employ a partner offering customisable packages that will match your HR needs while further reducing extra costs later on.  

In the long run, outsourcing your HR may even save costs and provide you with better use of resources and insights for your department.  

  • The outsourced firm will not understand the business 

Many HR leaders and department heads would assume that providers are merely sleeping partners, meant to do a few basic tasks. These partners do not understand their business nor contribute to the client’s overall growth. 

As with many things, there are a lot of options out there for you to find the right outsourcing firm. As capable professionals in their field, HR outsourcing firms can be beneficial to your business when they work collaboratively. They often provide advice, guidance and insights to help you manage your team. Partners at Ledgen work hand-in-hand with clients to help them solve their problems and give them peace of mind in running their businesses. 

  • HR outsourcing only works for large enterprises  

Another fallacy regarding HR outsourcing services is the idea that only large-sized organisations can benefit from outsourcing. Smaller businesses would face budget constraints and are unable to meet the requirements of some of the firms.  

The right provider can ease your strain and give top-notch services regardless of company size. They will be able to meet your capacity and workload to scale. The need for HR outsourcing services is not determined by the size of the firm, but rather by the organisation’s readiness to delegate to professionals and prioritise productivity.

  • The scope of outsourced work is too small

Depending on the outsourcing service provider, some of the scopes of work offered may truly be limited. However, there are also many firms, including Ledgen, that have been offering a lot more than just payroll maintenance and local provident fund calculation.  

Some of the scope of work Ledgen provides: 

  • Preparation and filing of related forms to the local authority on behalf of the employer including year-end returns
  • Being the preparer of our client’s payroll bank account to assist in making payments to employees and government authorities
  • Advisory on compliance requirements on employment, payroll and provident fund or pension matters
  • Prepare related forms and provide guidance for expatriates leaving the country
  • Registration with the local provident fund or pension provider or authority
  • Application of work passes/visas for expatriates
  • Employee personal tax service (including expatriate tax computation and submission)
  • E-leave – Employees can apply for leave on multiple non-consecutive days in one application as well as have a calendar view of colleague’s leave schedule
  • E-claim – Configure different claim forms for different types of claims
  • E-appraisal – Configurable appraisal forms based on your company’s requirements

As one can see, outsourcing service providers such as Ledgen offers more comprehensive payroll and HR administrative services. It is up to the client whether to choose a partner offering limited services, or another provider who is able to do more. 


Is outsourcing the right decision for your organisation? 

It is crucial to understand how outsourcing can either improve or hamper your overall performance. Take the steps and evaluate whether outsourcing is the right path by looking at key areas such as compliance, service levels, the scope of work, and processes.

Reach us out at Ledgen to get started on outsourcing your HR roles and responsibilities. From small to relatively large businesses, Ledgen’s committed HR & Payroll department works with clients who demand professional services of the highest calibre. 

Contact us to get started. 


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