Funding for small firms to outsource human resource tasks

SINGAPORE: From May, small- and medium-sized enterprises (SMEs) can tap on Government funding to outsource human resource (HR) tasks. This is a new initiative under which enterprise development agency SPRING Singapore will fund up to 70 per cent of qualifying costs incurred by firms in HR outsourcing.

Minister of State for Trade and Industry Teo Ser Luck announced this at an employee management conference on Wednesday (Apr 22), held at the Singapore Expo.

One SME is already planning to tap the Government’s help to outsource staff management tasks. Norhuda Rabani and her husband Ramlan Sanwan run a small company making instant cooking pastes and have six employees under them.

“At least I am free to actually look to other aspect of the business like marketing, meeting of clients,” said Ms Norhuda, the director of Asyura.

Getting external help for HR tasks is not new. Testing solutions firm Feinmetall has already outsourced some of its HR functions to external consultants.

Said Mr Sam Chee Wah, managing director of Feinmetall Singapore: “We discovered that we needed a certain professional knowledge to really go in depth, to understand the needs of the worker and to match a different perspective of course for them. And we really do not have this professional knowledge. So we decided to outsource.”

Under measures announced in Budget 2015, the Government is starting a shared services initiative for HR. This is aimed at helping small outfits, and under new details released, Government funding will enable firms to engage HR service providers to perform tasks like payroll processing and employee data administration.

Micro-enterprises stand to benefit the most from the initiative. Many of them simply do not have the capacity to set up a dedicated department to handle HR matters.

Eleven HR service providers have been appointed to help companies with staff administrative tasks. PrimeStaff is one of them.

“Where there is payroll, leave records, employee records and so on, there would be a one-time set up of about S$3,000, and then after that, depending on the number of headcount, there is a fee of about anything between S$20 and S$100 per month,” shared Mr George R Gaspar, a management consultant at PrimeStaff Management Services.

Government funding will help firms defray the one-time set up cost in outsourcing, and up to a year’s worth of subscription fees. Application for the scheme will be open till Apr 30, 2016.

More options for companies to tap shared services are also being explored. Mr Teo elaborated: “For example, shared reception desk … shared conference, shared meeting rooms. These are things that we think we can help reduce the cost of their operations.”

Singapore has five main SME Centres offering a variety of support for companies. From June 2015, they will be staffed with business advisors to provide HR and training advisory services.

This is expected to help more than 700 SMEs over two years. In 2014, SME Centres helped over 36,000 firms – a 40 per cent increase from the year before.

Author: Dylan Loh

Sources: Channel News Asia

Channel News Asia

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