9 HR Outsourcing Trends: Social Media, Mobile, Data and More

HR professionals are almost always well-versed in change management. The human resources field is constantly evolving as companies and organizations find new and better ways of achieving their goals. And a big part of that change is the shift toward outsourcing HR tasks.

Recent trends in human resources outsourcing have been almost as varied as snowflakes. Being aware and educated on current trends can help you keep costs under control, stay competitive, and keep your company thriving. According to an industry report, the global market for human resource outsourcing is expected to grow from $37.4 billion to $65.3 billion from 2022 to 2030 — a rate of 7.2% a year. The report estimated the U.S. market's value to be $10.9 billion in 2022.

This article will arm you and your HR team with information about the most impactful modern HR outsourcing trends.

HR Outsourcing Trends

Many companies find value in working with HR outsourcing firms. Some of the common ways that outsourced HR teams help companies are:

• Providing expert assistance. Small companies especially may struggle with hiring an HR professional with extensive experience. An outsourcing firm typically provides expertise from highly trained, and sometimes specialized areas.
• Cost effective. Tight budgets that can't support the salaries and benefits of a full HR team may be able to outsource for a more cost-effective solution.
• Freeing up resources. Instead of spending time on HR functions, leaders can focus efforts on building and maintaining the business.

Here are 9 of the current HR outsourcing trends you need to know about.

1. Growth of professional employer organizations

Engaging with a professional employer organization (PEO) is gaining popularity for different types of business. A survey of business owners and decision makers found that awareness of professional employer organizations (PEOs) rose by 44% from 2018 to 2023. A business analyst noted that growth in the PEO industry is "being driven by the growth of small and medium-sized businesses, increased costs related to workers’ compensation insurance coverage, workplace safety programs, employee-related complaints and litigation, complex regulation of payroll, payroll tax and employment issues."

Instead of piecemealing out HR functions like only payroll services or benefits administration, PEOs provide a comprehensive HR solution. These organizations help with payroll processing and benefits administration but also oversee a wide array of HR functions. By entrusting PEOs with the HR spectrum, businesses can streamline operations and free up their management teams to concentrate on strategic objectives. Using a PEO is a holistic HR outsourcing solution that helps to optimize efficiency and helps with HR compliance while allowing businesses to stay agile in a competitive market.

2. Social media recruiting

Companies and job seekers alike are relying on social media platforms to fill and find positions. Companies advertise open roles on social media, and candidates looking for their next career move pour over these ads. HR outsourcing companies are making the most of social media to find and recruit new talent.

3. Mobile solutions

Mobile-friendly is no longer nice to have, it's a requirement. Since everyone "lives" on their smart devices, companies that don't embrace mobile may miss the boat on connecting with new hires and receiving important information. An article by Forbes Advisor noted that making a job application mobile-friendly increases applicants by more than 11%, because some potential candidates lack computer access. Mobile features like real-time communication and electronic document signing facilitate many aspects of HR administration, smoothing the way for more efficient workflows. For more on leveraging mobile technology in hiring, read our article on mobile recruiting strategies.

4. Recruitment process outsourcing

The HR outsourcing industry saw a way they could benefit their clients by offering recruiting as part of the HR services. From advertising and connecting with candidates to scheduling their interviews and vetting them, to analyzing their performance, outsourcing firms help with the process. Outsourcing the recruitment process can help organizations connect with higher-quality talent, move through the hiring process faster, and get to candidates quicker.

5. Recruitment analytics

Most HR outsourcing firms provide a deep dive into job candidate and employee data, benefits administration, and other valuable metrics. By doing a recruitment analysis, for example, companies can see the type of candidate interested in their roles and capitalize or adjust accordingly. Recruiting, employee management, and other elemental HR responsibilities can be better maintained through analyzing data.

6. Performance and talent management

One of the latest HR outsourcing trends involves employee performance. In the current job climate, companies are fighting for high-quality talent. Smart leaders are using HR outsourcing providers to help keep their top performers at their company. This can include help with handling conflicts, explaining and administering benefits, and employee reviews and feedback. The goal? Greater motivation and higher employee engagement across the board.

7. Changing employment-related rules and requirements

Changing employment-related rules and requirements can significantly impact how businesses manage their HR functions, affecting everything from payroll processing to employee benefits administration. These changes can influence not only payroll and benefits but can also shape the strategic direction of HR functions. As regulatory changes, outsourcing providers can play a pivotal role by offering real-time expertise. They can help a company stay on top of employment-related rules and requirements.

8. Risk Mitigation

Depending on the industry and state you're in, compliance can be a substantial challenge. That's why many companies are using outsourced HR teams to help them mitigate certain risks. Staying on top of HR compliance can help save a company a lot of time and headaches. A commitment to keeping up with compliance can help prevent potential penalties and fines and disruptions to your operations.

9. Cloud-based solutions

Not long ago, many organizations held their employee data like their date of birth, Social Security number, and address on an internal computer system. Since data breaches and computer crashes are becoming more of a threat, the integration of cloud-based solutions has emerged as a pivotal trend. Through cloud-based solutions, data can be more secure but still readily available when the company needs it. This is an area where an HR outsourcing model can be cost effective. Rather than paying for new software, annual updates, hardware maintenance, and IT staffing, a company can obtain data management software as part the outsourcing services. The peace of mind that comes with knowing data is both centralized and easily accessible is another benefit of outsourcing.

Staying Ahead of Industry Trends

Managing every facet of your company's HR department can be a big undertaking, especially for smaller companies with limited resources and budgets. Choosing to outsource some or all of your HR processes can offer powerful advantages that help your organization stay efficient, well-staffed, productive, and in compliance.

Could your organization benefit from an HR outsourcing solution? Trust TriNet to provide you the HR expertise you need to stay viable and relevant in today's workplace. Find out how TriNet can provide you with a complete, innovative HR solution.

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