Guide to HR Outsourcing for Businesses in Singapore

Over the years, human resource (HR) outsourcing has changed for organisations in Singapore and around the world – instead of randomly handing out any type of HR services to an external organisation for the primary reason of saving costs, companies are now recognising the value of outsourcing services according to their unique needs. As such, outsourcing is often done when certain HR tasks are too time consuming, such as with specialist recruitment or work pass management, or time-related and only needed during a certain period each year. 

When HR services are outsourced in an intentional and intelligent manner, the company is able to fill the gaps in skills, enhance business outcomes and processes, improve HR efficiency, as well as save costs. Companies might opt to contract only specific work processes, administrative tasks, HR technology platforms and systems, or everything

combined to an external service provider. Here are three important HR services that you can consider outsourcing for your business, according to your specific needs: 

#1 Recruitment outsourcing 

Hiring employees is a long and tedious process that can take three to twelve months, and even longer for specialist or senior positions. On top of the large amount of time that it takes to search for candidates, set up interviews, follow through with the interview process, and, finally, put forth contracts, it is now even harder to find the right talent – especially in niche industries like IT. 

Outsourced HR specialises in helping companies to find the best candidates for the role, and from all levels including executives, managers and consultants. From forming a powerful job description to narrowing down the top candidates for the respective positions, outsourced HR is known for creating one of the most effective hiring processes. 

#2 Payroll outsourcing

Administrative tasks like payroll are often outsourced so that the in-house HR can focus on more critical strategic plans, such as employee compensation and benefit strategies to fulfill the company’s talent attraction and retention objectives. 

Outsourced payroll services can include establishing employee databases and records, as well as processing deductions according to Singapore’s statutory contributions such as the Central Provident Fund (CPF), Child Development Co-Savings Scheme (CDCA), Skills Development Levy (SDL), and more. At the end of each year, HR also has to file the Employee Remuneration Report, wherein the employer is required by law to report their employee’s earnings. 

#3 Leave administration

Leave administration is the process of managing employee’s time-off requests accurately, fairly, and productively. HR has to ensure that leave administered is compliant with statutory requirements, there is sufficient staff available on any given day, and employees are satisfied. Although leave administration is important, it is also a routine and time-consuming process, and thus one that many companies choose to outsource. 

This way, companies can leave it to outsourced HR specialists to set up various leave and employee entitlements, design leave approval structures, and determine encashment for unused leave entitlements. Outsourced HR also covers preparing year-end carry forward, closing, and forfeiture of leaves, as well as writing leave reports.

#4 Work pass management 

As of December 2020, there were 177,100 Employment Pass holders in Singapore and 174,000 S Pass employees. Work pass applications are subject to government regulations and these regulations might be different at various points of time. With the significant percentage of work pass holders in Singapore, it is necessary for HR to be equipped with industry skills to handle the application, appeal, renewal, and cancellation of employees’ work passes. Work pass management is an example of niche HR specialism in Singapore, thus, also being a service that most companies choose to outsource.  

All in all, HR outsourcing is greatly advantageous to your company when you carefully identify your company’s needs, goals, and objectives in order to find the best services to keep in-house or outsource. CLA Global TS is an accounting firm in Singapore that provides HR outsourcing services including specialist recruitment, payroll, work pass management, leave administration and claims processing. You can get in touch with experts at CLA Global TS to be advised on what services to outsource, as well as find out how we can help. 

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