By Foo See Yang, Managing Director & Country Head of PERSOLKELLY Singapore
In the post-pandemic world, barriers to enter markets across the APAC region have been reduced – presenting opportunities for companies to expand into new markets and grow their businesses.
While such opportunities and growth are presented to companies, some are hesitant due to the bureaucratic hurdles that may present business risk; for example, they may find it difficult to justify the risk against the possible return on investment (ROI).
This is where companies should consider an outsourcing strategy to reduce the risk and maximise their ROI!
In this article, we look at four benefits of outsourcing the HR process to a Regional Talent Solution (RTS) provider – an entity that is legally responsible for the entire HR process on behalf of its client – as well as how to choose the right provider for you.
Why businesses hire an RTS provider
Here are four key benefits of working with an RTS provider:
1. Minimise compliance risks
Every year, businesses lose millions of dollars and valuable time due to regulatory and compliance issues.
An article by Bloomberg, ‘Rising compliance costs are hurting customers, banks say’, quoted data from the Risk Management Association's second annual bank survey in 2018, where half of the businesses surveyed reported their compliance costs to be between 6-10% of total revenue.
The complexity of compliance with regulation and risk increases as each market has its own set of labour and tax laws – hence, companies turn to an RTS provider for their expertise and experience in managing legal procedures for local markets.
An RTS provider is responsible for all the compliance and regulatory issues related to your workforce, including taxes, payroll, Workers’ Compensation insurance, and other compliance factors.
The company will take care of all the regulatory and compliance aspects for you, so you only have to focus on running your business.
2. Minimise paperwork and maximise cost efficiency
There is a lot of paperwork involved in complying with tax and labour laws.
On top of that, you’ll have to deal with the administrative and logistical burden of managing the payments, benefits and other logistical issues for each person on an individual basis.
An RTS provider will also help you create and manage the paperwork necessary to prove you’re meeting all these requirements, which can be especially helpful if you’re hiring remote employees – if you hire contractors or freelancers who aren’t in your office, it can be difficult to track the paperwork necessary to prove you’re complying with regulatory and compliance standards.
Setting up a local business entity for this purpose will increase your cost of business. However, if you use an RTS provider, you can put those burdens on the company – letting you focus on your core business activities and strategy for expansion into new markets.
A Forbes article ‘The Big Difference For Your Small Business: Outsourcing HR’, mentioned that outsourcing HR to the Professional Employer Organisation (PEO) can make a big difference even to small businesses.
3. Easily onboard new employees and provide better support for remote workforce
One of the biggest challenges of hiring offshore employees is onboarding newly-hired remote workers.
You spend time finding, vetting and onboarding talent, which can be a major drain on your time and resources, while you also have to map out the remote work that is suitable for the offshore team and make sure they’re properly trained and prepared before they start working on your projects.
An RTS provider can help you avoid these issues by providing an online platform which allows you to view the progress of employee recruitment and the documentation of each new team member.
Some of the staff portals have the function for you to communicate or assign your employees projects, provide them with training materials, and manage their tasks and schedules.
On the other hand, the remote workforce can enjoy better support from an RTS provider as they are not limited by time-zone differences.
4. Pay employees quickly and easily
Another major benefit of using an RTS provider is the ability to pay your employees quickly and easily.
Many RTS providers allow you to pay employees instantly, and some even allow you to make one-time payments.
An RTS provider can also provide payroll services such as tracking hours for your employees and managing leave or other employee benefits.
How to choose the right RTS provider for you
As demonstrated above, an RTS provider is an important partner in your business – and selecting the best one for your needs will save you time and money in the long run.
Here are some guidelines to assist you in choosing a suitable RTS provider for you and your organisation:
1. Mapping out your requirements against the services an RTS provider carries out
The first thing you need to do when considering an RTS provider is to understand your own business objectives and HR needs.
For example:
Next, you need to understand the solutions, products, and services offered by the RTS provider; how many employees are they are able to manage? How comprehensive is the package they’re able to provide?
Questions like these are important to answer when evaluating an RTS provider, ensuring their services can meet your expectations.
You might even use a problem-solving diagram, charts, or other tools to help you organise the information to make better decisions.
If you choose a company that can’t support your needs, you’ll end up wasting time and money in searching for a new RTS provider.
2. Be aware of the fees and costs
Next, you need to understand how the company charges for their services – some companies charge a flat rate for services, some charge a percentage of the employee’s salary, and some charge both a flat rate and a percentage of the salary, depending on the services they offer.
Make sure you understand how the company charges for services before you sign a contract.
Also, don't forget to check whether there's any impact on cost due to foreign exchange rates.
3. Check the RTS service provider's reputation
It is important to check the company’s track record and reputation.
You can do this by reading reviews online, or you might ask other organisations you know have worked with the company if they would recommend their services or whether there's any red tape you should be aware of.
You should also take note of an RTS provider’s market presence and industry experience, to give you a better idea of their capabilities and reliability.
4. Ask about customer support
Finally, you should also ask about customer support – how quickly can/will the company respond to questions and requests?
Customer support is crucial for businesses of all types, and it’s something you should consider when choosing an RTS provider.
If their customer support is weak, it is unlikely the RTS provider will be able to provide a good work environment or company culture for the skilled talent you need.
This means talent retention will be affected and when retaining employees is an issue, it is unlikely employees will perform at their best – thus stunting the output and growth of your business.
In summary
Choosing the right RTS provider for your company is critical, as it allows you to offload your HR needs so you can focus on your market expansion plan, reaching out to potential customers/business development and the day-to-day operations of your business.
According to our recent Workforce Insights report, ‘Hiring and Managing Talent Beyond Geographical Boundaries’, 84% of employers in the Asia Pacific region are in favour of, or are already adopting, offshore recruitment strategies post-pandemic, with 80% of employers saying that offshoring was effective in helping meet the demand for talent and other requirements for their businesses.
As such, hiring a suitable RTS provider can increase your competitive advantage in the market.
At PERSOLKELLY, we are one of the leading HR solution companies in the Asia Pacific region – with a presence in 13 markets, we provide comprehensive workforce management solutions across the region.
Our global scope with a local focus has positioned us as a reliable RTS provider for many organisations in various industries. Contact us today, at TalentsSolution@persolkelly.com.
