An efficient HR department is the lifeblood of every organisation. Some businesses are motivated to outsource this lifeblood, the main reason behind the motivation is the possibility of a reduction in management costs. While the reduced costs are lucrative, businesses might also want to consider other effects of outsourcing their HR department.  

This blog post shares the reasons why an organisation should not invest in outsourcing its human resource management responsibilities.

1. Losing the human touch 

HR is one of the most sensitive departments in an organisation. HR personnel engage with employees and their families day in and day out for matters such as leave, promotion, health, work-life balance, etc. At times HR personnel also need to counsel certain employees to help them improve their performance and continue being a valuable asset to the company. Eliminating this service at workplaces can lead to a lack of human touch. It might cause a decrease in employee morale. Employees might feel they are not valuable to the company. 

2. The control now lies with somebody else 

Organisations grow with time and efficient employees. And a growing workforce presents a growing management requirement. Management cannot pay attention to every employee and their concerns in an expanding workforce. An HR team sitting overseas might also not be as efficient as an in-house HR department that can keep every routine HR task under control and work with employees. Outsourcing the role of HR can result in a loss of control.

3. Reduced accessibility 

Employees may feel uncomfortable talking to HR personnel over the phone about a personal matter. Another example may be that there is an emergency, and the employees need guidance to deal with the situation. Having an HR member at the workplace to advise on these types of situations is more beneficial and more hands-on. Situations where employees are required to discuss employment matters with someone over the phone might induce a feeling of being left alone in the workplace. They might consider that the company does not deem them as important.

4. More time for changes 

Businesses need to adapt to changing market conditions to survive. The strategic changes in an organisation are usually successful when the HR department adapts to them efficiently. An outsourced HR vendor may take more time to adapt to such changes than an in-house HR team that has been involved in the changes right from the beginning.

5. Lack of privacy 

HR departments come across confidential employee and business information all the time. An efficient in-house HR department will process such sensitive information with the required privacy and reduce the chances of any possible discrimination or adverse effects amongst employees. Sharing such information with a team outside your organisation might hinder privacy.

6. Tumbling productivity  

The quality of the HR team is directly equivalent to the productivity of the entire workforce. The HR department is responsible for managing daily business activities and keeping track of employee performance and requirements. An outsourced HR team might fail to provide the level of employee engagement expected as per the business standards.

7. Poor hiring 

In-house HR personnel generally know the exact type of new employees that would be suitable for the company. Whereas a remote HR department will only follow a provided checklist defining what the company requires. This can result in poor and inappropriate hiring.

8. Knowledge deficit 

With an in-house HR department, HR personnel can enhance their knowledge and skills of the organisation and deal with pressing HR management issues hands-on. However, a remote HR team is generally not directly involved in a company’s daily activities leading to a considerable knowledge deficit.

9. Change in company culture 

Outsourcing HR creates a major change in company culture. It may also give rise to trust issues between the remote HR team and employees. The types of HR processes that are outsourced can also change the company’s outlook towards those processes. 


Experts suggest that outsourcing your HR management can prove detrimental to your organisation in the long run. Companies must instead invest in a reliable human resource management system to aid the HR department in performing their duties and tasks efficiently. Sentient’s HR management system is the platform that provides all the features to help streamline the process and save time and costs of human resource management. Contact us today to know more.