5 mistakes when moving to HR and accounting outsourcing: find and eliminate

Choosing a provider on price alone

At first glance the cheapest offer looks the most attractive. But often the provider does not include all the services the client may need.

For example, when signing the contract the provider quotes the basic package without taking the client's specifics into account. Only after work starts does it say which services must be paid for separately. As a result the final cost is much higher than what was agreed at the start.

How to avoid the mistake:

• During negotiations, describe your business specifics, processes and the tasks your employees perform in detail. The more detail you provide, the more accurate the quote will be.
• Ask the provider for a detailed proposal describing every service. Check what is included in the base price and what will cost extra.
• Make sure the required scope of work and the final price are agreed and fixed in the contract.

Not allocating resources to hand processes over to the provider

You cannot simply sign with a provider and forget about accounting and HR tasks. The transition takes time and involvement from your employees.

If you do not allocate enough resources at the start of the engagement to hand the work over, important information can be lost. The provider then works with incomplete data, which slows things down and leads to errors.

In our practice there was a case where the accountant was made redundant before we took the company on. That company calculated overtime pay not the way everyone else does but using its own methodology. Because the accountant had already left, the methodology was never handed over to us. As a result people received a different salary from the one they expected.

How to avoid the mistake:

• Make sure the provider has a process handover plan. It should include studying the company's internal regulations, interviewing employees and transferring key documents.
• Appoint a responsible employee to work with the provider at every stage of the handover. This reduces the risk of misunderstandings, lost data and future errors.
• If there is not enough time for detailed interviews, invite the provider to visit your office and study the processes in the field. Bear in mind that this may cost extra - for example, if the provider is based in another city.

Hiding part of the work from the provider

Some companies deliberately or accidentally give the provider incomplete information about their processes. The reasons vary. Some want to lower the price, so they say, for example, that one employee did the task rather than three. Others simply do not know the employees' tasks in full, and the employees have already left.

The provider then takes on the project based on wrong data, and during the work it turns out that the scope is much larger. The contract has to be revised, new terms agreed and the cost goes up.

How to avoid the mistake:

• Describe the processes you want to outsource in detail. Draw up a clear plan and a statement of work setting out the full scope and the competences the employees need.
• Be honest with the provider. Hiding part of the work to lower the contract price is pointless: the provider will see the actual scope anyway and the contract will have to be revised.
• If needed, ask the provider to help estimate the real effort - for example, how many people and how much time your tasks will take. That way you avoid misunderstandings later.

Breaking the rules and deadlines set out in the regulations

The regulations providers draw up set deadlines and procedures not only for themselves but for clients too. Companies often send information to the provider late and still expect an immediate result. This affects quality: any break in the provider's schedule creates a rush and can lead to errors and delays.

How to avoid the mistake:

• Stick to the information handover schedule. The provider undertakes to complete its tasks on time, and the client must also supply the necessary data and resources on time.

Choosing a provider without a quality control system

If a provider has no internal quality control system, its work may be unstable - for example, results arrive late or contain errors.

Without a control system you also cannot track progress, and problems may go unnoticed until they become serious.

How to avoid the mistake:

• Ask the provider how it controls the quality of its services. A reliable provider should be ready to show reports and examples of checks so the client can judge the quality of that control.
• Choose a provider with a well-established quality control system. For example, if an outsourcing company has implementedthe ISO 9001:2015 quality management standard, it works to strict requirements, runs regular internal checks and audits and gives clients detailed reports on the work done.