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Many companies are investing in building the internal Human Resources capacity within their business units. The focus has shifted from increasing productivity and towards increasing value both to shareholders and customers.

It is not about shedding the administrative role, but diversifying into other areas. Organizations believe that HR can bring enduring value by helping managers cope with and initiate change.

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In-House Human Resources Cost Model


There is a growing trend to automate or outsource Human Resources (HR) transactional functions for example. HR call centers are being utilized, benefits are being outsourced to specialized companies, training departments are being outsourced, and the majority of employee- relations activities are available on the company intranet. This raises the question of what value does HR bring to the organization if organizations outsource all the functions?

The global market place is in constant change which has increased the need for flexible cultures, therefore HR professionals are being asked to assist in building line organizations that are adaptable, creative and open to new ways of doing business., such as:

  • Business knowledge to understand the business, know operations, interface with all departments uncovering challenges allowing HR professionals to be proactive with   system implementation changes.

  • Keeping up with innovation staying on top of HR practices and adapting to the necessary cultural climate.

  • Managing change is the biggest challenge facing organizations today and HR practitioners can provide communication vehicles via feedback systems, and assessment tools to uncover opportunities for new thinking and behavior.

  • Cultural management by reinforcing acceptable code of conduct and behavioral standards of employee performance to sustain the organizations culture.

Cost Model for In-Sourcing According to Company Size:

  •  30 to 100 employees typically has an in-house HR Administrator $40,000 – 50,000 who is responsible for a variety of compliance programs, benefits, employee relations and other HR administration.

  • 100-150 employees, an additional HR generalist $60,000 - $80,000 who has full responsibility for administering general Human Resource Programs.

  • 400 to 500-employees an additional HR Director $100,000 - $150,000 and even an in-house recruiter, $50,000 - $70,000 may be part of the HR team. The HR Director oversees and directs all aspects of the Human Resource functions at all geographic locations.

 

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