Topic Outsourcing HR / PEO,

Why Employees Need to Trust HR Outsourcing

Why Employees Need to Trust HR Outsourcing

Most employees do not trust human resources. Though HR is a crucial part of employee management, most organizations face a general crisis of trust. According to this survey, 50% of the respondents disagree that HR is trustworthy, while 69% do not believe HR takes the employee's side.  

HR outsourcing is one of the ways companies can mitigate this crisis. However, if you do not take care during the transition phase, you could worsen the situation. The success of HR Outsourcing depends on whether employees can learn to trust HR outsourcing companies.  

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Establishing trust with an HR outsourcing company requires total transparency and clear communication on management's part. In this post, we focus on how HRO can help you deal with the employee trust issue.  

But first, a look at some of the advantages you can accrue from increasing employee trust. 


5 Advantages to Increasing Employee Trust  

A company's workforce is responsible for all the operations, including sales, marketing, production, etc. You cannot achieve success in any business without trust in and between your employees. It is the oil that keeps the engine moving.  

Some of the advantages of increasing employee trust include: 

1. Productivity 

Everyone's mind is at ease in a workplace where trust exists. When employees feel psychologically secure, they can devote more attention to their work. In addition, they will also be more willing to share new ideas and solutions to challenges in the company. Employees in such environments have no problem putting in more hours, which is good for business and translates to happier employees and an improved bottom line.    

2. Morale 

If employees feel that no one can help them with their situation, the general morale will decrease. But in a workplace environment where you give them a chance to be heard and their grievances addressed, the motivation to work increases. Also, employees go through difficult personal moments such as bereavement.    

Draconian HR laws like requiring proof of death are some of the issues hindering trust in your company. The best way to ensure a positive culture is by building trust between the HR department and the staff. Let employees feel that they can approach you anytime. 

3. Engagement 

Employee disengagement may be costing your business a lot. According to Gallup, a company of 10000 employees each earning an average of $50000 loses about $60.3 million annually. A high-trust workplace tends to have better-engaged employees. You won't engage employees in their work if they can't trust their own HR department with their employment issues. Ask yourself whether your employees would come to you to request more tasks when they feel underutilized. 

4. Retention 

The days of 'I will work for this company until I retire' are long gone. Employees are ready to move on when they feel dissatisfied. High employee turnover can be costly. You need to recruit, hire, and onboard regularly, which is not financially healthy for your business.    

But, simply improving the trust between the employees and human resources is enough to raise the employee retention rate. Better engaged and positive employees are more likely to stay with a company for longer, sometimes up to retirement.  

5. Litigation 

If employees feel they have no recourse within the Human Resource Department, they are more likely to take their issue to a public forum or even a courtroom. In an environment where you nurture trust, employees will not worry about victimization for reporting issues to HR because they trust you will do what is expected.  

Building a trusting workplace environment ensures the channels for solving issues in the company are open to all employees, regardless of position. Litigation can cost you in terms of money and reputation.  

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How Does HR Outsourcing Mitigate the Trust Problem?  

At first glance, it may appear that HR outsourcing will only worsen an already bad situation. However, a careful look at all the benefits of HR outsourcing reveals that it will improve the relationship between the HR department and employees. It also saves your company on costs and time.  

One of the ways outsourcing helps solve trust issues is through effective communication. Most employees feel like the HR department is out of reach to them. As a result, they do not report issues for fear you will not take any action or they may be victimized. Issues such as sexual harassment and salary issues, go unresolved and may erupt in the future, resulting in legal battles. 


When you outsource HR functions, the service provider provides a portal for employees to submit their issues. They also provide personal assistance from a professional point to employment-related problems.    

In addition, when you process employee claims on time, it further increases the employee's trust. The findings of this study on Professional Employer Organizations show that employees are more satisfied if their employer is a PEO. It also found that these employees and clients are more likely to report that:  

  1. Their company shows a commitment to their employees.   
  2. They are more engaged at the workplace. 
  3. Increased intention to stay with their current employer until retirement.  
  4. Employee turnover decreases.  

PEOs are experts in HR management. When you partner with them you get access to the latest technology and a wealth of experience in HR management. Since they practice HR best practices, they leave you with happy employees.  

Laura Platero

Laura Platero

Laura serves as the Director of Product Strategy. She is an expert in large scale benefits account management, project management, product development, sales, customer service, and benefits consulting.