HR outsourcing involves hiring an outside HR professional or firm to meet staffing needs. Companies may outsource if they lack HR expertise, risking increased turnover and lost resources. Employment agencies offer a range of HR services, including temporary and executive recruitment.
HR outsourcing is the business practice of hiring an outside human resources (HR) professional or firm to meet an organization’s staffing needs. Some of these needs might include recruiting, screening, hiring, and sometimes training new employees for the organization. An organization may consider HR outsourcing if it does not have a human resources department or qualified HR professional to properly recruit the best possible employees. Organizations that attempt to recruit new employees without knowledge of effective screening and hiring practices risk increased employee turnover and lost resources spent hiring and training the wrong people for the job. The companies that organizations outsource HR to are sometimes referred to as employment agencies, temp agencies, or headhunters.
Employment agencies typically employ a range of professionals to facilitate HR outsourcing, including a receptionist to greet and pre-screen job applicants, an account manager to liaise with clients and place job advertisements for them, and salespeople to settle accounts with customers and handle invoicing. Some employment agencies specialize in placing short-term temporary employees to fill positions vacated by employees on temporary leave, such as vacation, maternity leave, or sick leave.
In these cases, “temporary employees” are direct employees and paid by the employment agency, not the organization they work for temporarily. If temporary workers need to call in sick or have a problem with the workplace, they will contact the employment agency and not the workplace. If a client of the employment agency is satisfied with the temperature provided, they can “middle” the agency to hire the employee as a permanent staff member once their contract with the agency ends.
Employment agencies that specialize in executive recruitment often deal with clients looking for a permanent employee rather than a temporary one. They tend to take greater care in actively hiring executives (headhunting) to meet their clients’ needs, compared to the more passive practice of tapping a database of resumes to fill temporary positions. An executive interested in finding employment with a new organization can confidently contact an executive employment agency to see if he is a good fit for any of the agency’s clients and vice versa.
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