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The Benefits of Using HR Outsourcing and Staffing Company in Vietnam
29-Oct-2019

The Benefits of Using HR Outsourcing and Staffing Company in Vietnam

Human resources management (HRM) is an important function for any company. HRM handle everything from recruitment and onboarding employees to managing benefits, developing training programs and overseeing compliance with employment rules and regulations. Although outsourcing HR might not be right for all businesses, there are some significant advantages to do so, especially when it comes to saving time and money.

Being a small and medium (SME) company or a foreign direct invest (FDI) company in Vietnam, outsourcing the HR functions is one of the options that you can consider. There are a numerous benefit for your company and your employees when having the HR functions handled by the professional HR outsourcing and staffing services company.

HR outsourcing helps control costs better 

One of the biggest advantages of outsourcing HR functions is cost saving. The HR shared service company can help optimize cost in several areas such as:

·       Lower salary expense. The labor marketing in Vietnam reaches to 56 millions of people however for big cities such as Ho Chi Minh city, Ha Noi or Da Nang, the labor market for skilled workers is competitive. SME or foreign companies find it hard to recruit the right resources thus will have to pay higher than the average level.  Secondly, the experienced HR manager will require high salary plus benefits to retain the position. Depending on the size of the HR department, but in most of the case a small to medium-size business does not need a full time HR director or manager, thus outsourcing to HR service companies can save cost.

·       Reduce costs for benefits, as the HR service company can negotiate better rates for a large pool of clients. The HR service company can leverage the economy of scales to negotiate with vendors for additional benefit such as insurance, travel, training at a lower price.

·       Reduce costs for hiring and training. A HR service company not only helps ensure that the companies hire the right people to reduce staff turnover and associated cost, but also has the resources in place to cut the costs of hiring and mitigate the business interruption.


Enables Business Leaders to focus on strategic tasks

Outsourcing the HR functions frees up the time of business leaders to focus on other priorities. A research shows that 81 percent of small business owners handle HR on their own – and more than 30 percent weren’t sure they were doing everything correctly. As a foreign invest company in Vietnam, with cultural difference, it is even more time-consuming and stressful for the management team to manage people. Managing employees today is complex and requires specialized knowledge to comply with Vietnam law. Most FDI country managers and small business owners simply don’t have that knowledge, and thus can make mistakes with payroll, do not have the proper paperwork on employee records. These gaps in knowledge will create more risk and cost money, and distract the business leaders from core activities.

A research shows that despite working an average of 50 hours or more per week, business leaders only spend about 30 percent of that time on actual business functions. The rest of their time is spent on administrative and other tasks that don’t help growing revenue. By outsourcing human resources, that time can be devoted to other business functions. You can save the time spending on paperwork or dealing with payroll and benefits issues, to develop strategic plans, set goals for the organization, work on marketing and sales, all of which will ultimately grow your company. 


Outsourcing HR functions improves hiring process 

HR outsourcing company can also help hiring better staff as they have access to larger pool of applicants. Today job seekers not only look for opportunities that pay well, but also offer a comprehensive benefit package. A report indicates that 22 percent of small businesses lost good employees because they couldn’t match compensation and benefits packages. With a HR outsourcing company, it’s possible to offer a more attractive benefit package, including insurance, travel and training opportunities. 

HR service company can also help with the onboarding process. They help to define a consistent onboarding process and once employees are settled down, they can monitor the employee performance, as well as provide market insight to help employee retention. 


HR Outsourcing improves compliance 

In Vietnam the legal system was initially modelled on the French and Soviet systems until the late 1980s. After the Doi Moi, Vietnam transformed its economy from a centrally planned economy to a market-oriented economy. Thus the law system has also been shifted from socialist-based models to those typically found in a western legal system. However there are still many points different with the western system. Unlike in developed countries, Vietnam employment and wage laws are changing frequently, and businesses must adhere to not only country rules, but also provinces and local regulations regarding employment. Besides that, companies in Vietnam are required to have labor union. Failing to comply with these rules can have serious financial consequences or lawsuits, it is a serious risk when foreigners come and do business here not fully understand all these laws and regulations.

Outsourcing HR services helps avoiding penalties from noncompliance with employment laws and regulations as well as helps ensuring that your employee management practices are within the scope of the law such as harassment claims, discipline and termination. A professional HR service company will help you handle these issues and avoid any legal compliance risk.

Ensure HR operations continuity 

By engaging a professional HR shared services vendor, you can rest assured that your HR services is well handled for an extended period of time with zero disruptions. Staff turnover is inevitable, but your business and working functions will not seriously suffer from it.

The SME business owners or FDI country managers do not have to spend a long process of getting new employees fully productive. The HR service company already has the requisite knowledge and expertise 


Develop and retain an intelligent and satisfied talent pool 

The HR service company and experienced HR practitioners help you develop the professional HR and talent development processes. With HR shared services, you can easily build and retain a group of intelligent and satisfied pool of skillful employees to grow your company to higher level.


Bring additional benefits to your employees 

From the employees’ perspectives, using professional HR services can bring additional values such as:

·       Having comprehensive benefits, including medical insurance, life insurance, travel budget, training opportunities.

·       On-time and accurate monthly payment, fast and efficient claiming process.

·       Professional assistance with any employment related problems.

·       Helpful and informative orientations, trainings, and employee handbooks.

·       Higher job secure comparing to working for a small SME or FDI companies. They have also return-to-work programs in the event of an injury or maternity leave.

·       Up-to-date information on labor regulations and workers’ rights

·       Useful and convenient tools such as online HRM system, online payroll system etc.…

As a leading HR outsourcing company, SHAREWORK delivers these benefits through our excellent services including but not limited to recruitment and on-boarding, payroll and employee benefits administration, HR compliance, and talent management.