Global human resource outsourcing has grown by 5-7 per cent in recent years, mainly in manufacturing, financial services, technology, retail and services, experts said.
In Viet Nam too, HR outsourcing is favoured by companies, said John Antos, vice president, strategy, global payroll and Asia Pacific at ADP, a global provider of cloud-based human capital management solutions and business process outsourcing services, analytics and compliance expertise.
In 2021 Vietnamese businesses paid US$2 billion for business process outsourcing services, he said.
With Viet Nam’s high GDP growth and large workforce of 51 million, HR outsourcing has enormous potential, he told the first Viet Nam HR Outsourcing Conference held by Talentnet in HCM City last week.
With the rise of new business models, HR outsourcing has become a choice of companies that go through organisational change, significant growth or mergers or acquisitions or have a difficult time hiring or retaining talented HR personnel, but would like to focus on their business without reducing HR quality, access digital HR benefits and minimise initial technology investment, he said.
HR outsourcing services assist HR departments in performing strategic improvements, not merely transactional changes, enabling companies to experience positive changes such as constructing an equal wages policy, building an engaging culture and understanding the needs of employees to create suitable changes in the working environment.
Antos said after one or two years of using HR outsourcing services, companies can experience significant growth. Amid the positive economic outlook for Viet Nam, companies should look at the spending on HR outsourcing as an extra benefit instead of an expense.
Talking about the most important factor in deciding to use HR outsourcing, Nguyen Thi Xuan Huong, country HR director of AkzoNobel Vietnam, said companies need to have a clear answer for “Why do we need HR outsourcing services?”
According to delegates, there is no one-size-fits-all recipe for success in HR outsourcing.
They shared some factors to avoid pitfalls when businesses decide to use HR outsourcing services, including managing expectations by setting clear results in the plan, choosing credible partners that can deliver expectations and building an effective integrated system and/or data management processes to control and review service quality.
Huong said HR outsourcing has limitations such as an employee turnover rate that is double the rate for permanent employees and hiring low-quality workers.
To retain outsourced employees, companies need to consider them for permanent positions and offer them more benefits, she said.
Success stories
Nguyẽn Quỳnh Tram, country general manager of Microsoft Vietnam, said to manage 150,000 employees, 75 million organisations, 17 million partners and over a billion users, her company focuses on “culture” with four factors: cultural attributes, company values, manager expectations, and leadership principles.
Besides, its management strategy focuses on the principle of “optimise the capacity of every employee to optimise their result".
To create such a culture and assist the development of each employee, Microsoft chose HR outsourcing for many departments such as sales and marketing, accounting, office management, internal IT support, customer support service, and manufacturing, she said.
To be able to manage such a large network of outsourced personnel, it is necessary to develop a strict policy through diversity and inclusion, measuring outcome and regulatory compliance, she added. — VNS