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More firms expected to outsource human resource functions: ASME

The Association of Small and Medium Enterprises welcomes Government funding to allow companies to use shared human resource services. 

SINGAPORE: More firms are expected to outsource human resource responsibilities, with additional Government support in place, said the Association of Small and Medium Enterprises (ASME). It has welcomed Government funding to allow companies to use shared human resource services.

Earlier this week, it was announced that enterprise development agency SPRING Singapore will fund up to 70 per cent of qualifying costs incurred by firms in outsourcing human resource tasks. Human resource shared services that firms can tap with the help of Government funding include payroll processing and employee data administration.

Consultancies such as PrimeStaff and Capita offer organisations outsourcing solutions for employee management needs.

There are even consultancies that offer services such as staff development and training. As such, companies can pick and choose what they want to outsource.

The Singapore Human Resources Institute said firms with a headcount of 50 and below should consider outsourcing. Some of these small companies may not have the expertise to fully understand and comply with employment rules. Consultancies can then plug this gap for firms.

Said Mr Erman Tan, president of the Singapore Human Resources Institute: “They do not need to have the in-house expertise. Rather, they can turn to external expert sources, where they can look for the relevant advice. Other than that, they can have a peace of mind knowing that certain human resource compliance, requirements that are required by the labour law are met.”

That also means companies can free their attention to focus on core operations. The Institute said firms will typically do their sums to find out if outsourcing is an option that offers value for money.

WHAT TO OUTSOURCE?

The question is: What exactly to outsource? This is where top management has to factor in their strategic calculations, said ASME.

Mr Francis Koh, an Exco Member with ASME, and managing director of Capita Staffing and Search, said some companies may want to keep some human resource responsibilities in-house.

“Certain data and certain strategic initiatives are confidential, so they may want to keep this in-house. So some of the things that they want to outsource, like administration, payroll - these are easier things to outsource. So across different industries, I think they have to decide how to manage this whole process,” he said.

Beyond human resource, the Association said accounting, finance and logistics are other areas that the Government can explore starting shared services in.