Pros and Cons of Outsourcing
Employee Absence Tracking
The leave administration department of your company handles several essential tasks. They manage employee absences, process time-off requests, and address any leave-related items. This includes maternity or paternity leave and medical leave.
Depending on your company's size, the leave administration department likely doesn't receive enough requests to warrant hiring full-time employees. This is especially true for smaller to medium-sized businesses with a limited number of employees.
While some choose to merge leave administration into other human resource departments, there is a better option. Many companies are choosing to use an employee absence tracker and outsource some or all their leave-associated tasks.
But what are the potential benefits and downsides of outsourcing these tasks? Continue reading to find out everything you need to know, including how you can negate the potential downsides.
Pro: Lowers Cost of Leave Administration
Outsourcing your leave administration can lower costs for this business sector. There are two ways you'll save money with an outsourced employee absence tracker.
When you outsource, you reduce the need to keep part-time or full-time staff in-house. Keeping in-house staff costs a considerable amount and can lead to wasted man-hours. Often, leave administration doesn't need a full 40-hours or more every week.
The company you outsource employee absences and leave to can offer a better price. This is because they usually focus on leave administration exclusively, so their resources can be better allotted towards this task. Focusing on one sector of business administration allows for better pricing for clients.
Con: Less Control Over Leave Process
Outsourcing your leave process means you have less control. When handled internally, it's easier to manage complicated leave issues. Unique cases can be looked at in-depth, on a personal level, which is difficult or impossible when the tasks are outsourced.
Even more, failure to handle these complex issues appropriately can lead to severe consequences. Employees who feel they aren't treated fairly during the leave process can leverage costly claims and litigation against your company.
Pro: Increased Compliance
Outsourcing your leave administration tasks means issues will be handled according to state and federal regulations. Since everything is based solely on current laws, employees are more likely to follow these guidelines. With the law backing up your policies, there isn't much employees can say about how their issues are handled.
This is a double positive.
Your company reaps the benefits of compliance, which is as important as productivity. Your employees are also more likely to be satisfied with the leave process. This can help create a more pleasant company atmosphere.
Con: Risk of Employees Being Dissatisfied
When you outsource leave administration, you run the risk of employees being dissatisfied. This is generally a concern when the company used doesn't handle the change or task well. Employee morale can drop, which leads to less productivity and more disruption.
Pro: Ability to Better Adapt to Change
The company you outsource your leave administration to can better adapt to change versus what your company could internally. They can streamline leave and automate specific processes for more efficient handling. This often means employees will receive answers on leave faster, and disputes regarding absences can be resolved quicker.
The company you outsource to is also able to implement new software and adapt to these changes quickly. Since they operate within a very niche sector of business, their funding and time can go directly into making changes as seamless as possible.
Negating the Potential Downsides
The downsides of using an employee absence tracker and outsourcing leave administration tasks primarily revolve around poor performance from the hired company. The easiest way to negate these cons is by hiring a reliable company with an excellent track record. There are a few ways you can look into a company's reputation.
Be sure to screen potential leave administration companies before hiring them. Check online reviews to see what previous clients thought of the services provided. Look for companies with the highest ratings, and be sure to read any written reviews for more in-depth information.
If possible, ask other business owners or upper management professionals for references. Ask what companies they've previously used and whether they'd recommend them. If they wouldn't recommend previous companies, be sure to ask why not.
Another option is to run any potential companies through the Better Business Bureau (BBB). The BBB keeps track of complaints, resolutions, and reviews of all businesses. They also sometimes rate a company based on a set of predetermined factors.
Remember, costs are far from the only consideration when outsourcing any part of your business. Choosing a company only because they're the cheapest option is one of the most significant mistakes made when outsourcing work. You should first vet potential companies and choose the most affordable option among those, if applicable.
Do You Have More Questions About Using an Employee Absence Tracker?
Outsourcing some or all your leave administration tasks has its positives and negatives. However, the associated downsides can easily be negated by hiring a reputable company for these tasks. It's essential to always vet a company before hiring them and not choose based on cost factors alone.
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