Recently an online survey conducted by Sydney based Galaxy Research requested 579 senior HR executives from Australia, China, Singapore and Hong Kong share their views on challenges within the HR industry and also their current business practices.

The study found that across Asia Pacific, the majority of HR executives (80-90%) are currently considering HR outsourcing as a solution to challenges including recruitment (64%) and employee retention (50%).

The key drivers for companies looking to outsource include factors such as cost reductions, better customer service, and more time for employed HR professionals to focus on essential human capital strategies instead of general administrative tasks.

Until recently, many small and mid-sized enterprises (SMEs) in the Australian market have remained cautious about HR outsourcing, holding the view that only larger, multi-national organisations can benefit. However this mindset is slowly shifting; now organisations are beginning to indentify HR outsourcing as a strategic solution with advantages well beyond cost cutting.

Lisa Spiden, director of HR outsourcing firm, fibreHR comments that small and medium sized organisations need to work more efficiently than larger companies because they often have fewer available resources. For this reason HR outsourcing is a viable and practical solution for many SMEs.

“Outsourcing enables small and mid-sized enterprises to obtain specialist expertise within specific areas, instead of hiring one individual and expecting them to master the broad range of HR functions”, Lisa says.

Other key benefits of outsourcing include the freeing up of resources so that companies concentrate on their core business. Stability was identified as an important advantage, thus enabling an organisation to better deal with the peaks and troughs associated with normal business activity. Accountability of the outsourcing firm was also identified as a key benefit. It was in the best interest of that firm to provide a good service to maintain a strong client database.

To a large extent, Australian companies are still not fully aware of the flexibility provided by HR outsourcing, or the growing selection of available options outsourcing firms can provide.

“Early adopters of HR outsourcing have the potential to gain a competitive advantage, if outsourcing is the HR model that best suits their business requirements” Ms Spiden says.