| Outsourcing has received a bad reputation in the | | | | checks or deposits for each employee. It takes care |
| United States. But one must take care not to eliminate | | | | of the tax deposits for the company and sending any |
| any consideration of outsourcing because of possible | | | | other deductions from payroll to the proper recipients. It |
| outrage against it. Most companies outsource and do it | | | | then sends W-2's to employees at the end of the |
| without taking jobs away from Americans and giving | | | | calendar year and provides the company with various |
| them to foreigners (the contested type of outsourcing). | | | | types of reporting. |
| Outsourcing is commonly practiced so that a company | | | | This kind of work takes a bit of processing power and |
| can concentrate on what it does best, while letting | | | | would require each individual company to invest in |
| experts take care of needed business tasks not | | | | expensive software to track everything properly and |
| related to this company's primary purpose. | | | | legally. It's more efficient for a 3rd party to do it for |
| For example, a company that manufactures light bulbs | | | | many companies. Outsourcing reduces overall costs |
| has experts available in electronics, filaments and glass, | | | | and increases efficiency and accuracy. |
| light bulb specifications and standards and so forth. | | | | Another Human Resources function that is often |
| Since they don't need a lawyer all year, they hire one | | | | outsourced is hiring. This can be done in different levels. |
| from a law firm on those occasions they need legal | | | | For example, one company may hire an employment |
| assistance. In other words, they "outsource" their legal | | | | agency to do the initial screening of candidates just to |
| needs. The law firm exists, at least in part, to serve the | | | | make sure everyone the company sees meets a |
| needs of companies that either don't need to hire their | | | | minimal set of requirements. The company will take the |
| own full-time lawyers or wish to outsource their legal | | | | next steps of interviewing and choosing the new |
| activities for efficiency purposes. The law firm has the | | | | employee. In other cases a company could hire the |
| experience, staff and knowledge to solve the | | | | employment agency to do the entire process and |
| company's legal issues in a more quick and efficient | | | | present them with their new employee. This is rare for |
| way than the company would have been able to do | | | | permanent positions, but is often used for temporary |
| itself. After all, its expertise is in light bulbs, not the law. | | | | employees. |
| One area where companies both large and small | | | | The initial screenings are the most time consuming part |
| commonly outsource large areas of responsibility is | | | | of the employment process. Depending on the job, |
| Human Resources. Although every hiring company has | | | | there could be hundreds or even thousands of |
| a Human Resources function, it is usually only the tip of | | | | resumes received for a particular job. Going through |
| the iceberg with regard to how much Human | | | | these to ascertain the candidate meets the minimum |
| Resources work is really being done on behalf of that | | | | requirements for the job is not difficult work, but is time |
| company. | | | | consuming and tedious. Rather than spend its time and |
| Even our largest firms, who may have the | | | | money on this function, the company recognizes that |
| wherewithal to hire a full staff, recognize the value of | | | | paying others to do it is the financially sound thing to |
| outsourcing. Most of them will outsource certain | | | | do. At that earliest stage of the process, the |
| Human Resources functions such as payroll. In this | | | | outsourcing firm needs only to know about the |
| case, the payroll company keeps a database of the | | | | company and the needs for this position and, with their |
| company's employees with all the necessary data to | | | | interviewing expertise, can choose excellent |
| process their payroll, such as withholding rates, social | | | | candidates without first hand knowledge of the |
| security number and other deductions. Each pay period | | | | company or working environment. |
| the company forwards relevant period information to | | | | Outsourcing is a necessary component of a profitable |
| the payroll company. This would consist of hours | | | | company's business plan. By choosing wisely, a |
| worked, vacation or sick time used, new or terminated | | | | company can be more profitable and efficient by |
| employees, etc. The payroll company produces the | | | | letting other companies take some of the load. |