HR Outsourcing in UAE: What and How You Can Outsource HR Functions

HR Outsourcing in UAE enables an organization in focusing on the key strategic drives while being able to maintain crucial functions with external provision. An HR outsourcing service also brings forth the benefit of accessing costly innovative technology without having to investment heavily in additional capital. 

In this article, we will explore the aspects of Human Resource that are best outsourced to professionals, the benefits, as well as key considerations prior to outsourcing certain functions. 

Businesses typically find themselves struggling in focusing on important core operations which generate actual strategic value as they’re made to manage the numerous requirements and demands for anything that’s related to employee and government bureaucracy. For instance, instead of improving and developing employee talent and skills in sales for an organization to grow and get an advantage over its competition, it’s made to devote time on payroll, which is a process that’s incredibly complex and time-consuming. This is the reason why payroll outsourcing in UAE is a commonly acquired service for businesses in the country. 

What HR functions to outsource to experts in UAE 

The top reasons why businesses choose to acquire HR outsourcing services in UAE are cost reduction, quality, and access to expert knowledge and skills. The most common activities that are outsourced by businesses are payroll and legal services as they rely on the expertise of professionals. 

Interestingly, HR outsourcing is viewed by experts as a great way in developing and applying their skills. They are able to spend more time in being efficient and effective in processes that are required from and by businesses, thus benefitting organizations, most especially small businesses in UAE. 


Reasons to be against HR outsourcing in UAE 

There are some reasons that are valid with respect to being against outsourcing HR functions. Certain activities like rewards are to be kept within the organization as they demand inside knowledge to the goals and values of the organization. Also, talent management and strategic workforce planning both need inside track in order for them to be effective. Additionally, there’s the issue of losing understanding and expertise. Fortunately, there are HR outsourcing service providers in UAE that can train administration and key employees of businesses in order to allow them to fully understand the processes that they are to implement regularly.                   

How to make HR outsourcing in UAE a success for businesses 

In order for UAE HR outsourcing becomes successful and effective in providing myriads of advantages to a business, Human Resource consulting or experts are to be mindful with the fact that they may lose flexibility in changing their services and making sure they fit the requirements of businesses. If the business has a HR department in-house, there is a need for the department to make careful analysis with the requirements that the business will need in the future in order to make sure they are still relevant to the business. Having in-house staff and outsourced experts running the HR department of a business can be the most beneficial option for more established businesses in the country. 

Remember that a model for HR outsourcing creates a huge shift in employees and the company culture. Employees are to make preparations and the management has to be adaptable to the change. The outsourcing relationship can be managed and monitored carefully. As for contracts, they are to be negotiated as per the requirements of the organization.     


Key performance indicators or KPIs which have to be monitored and agreed in order to make sure there’s effective HR outsourced performance are as follows:

  • Percentage of complaints on the services that are contracted compared to the overall percentage of user complains; 
  • Percentage of shareholders that are fully satisfied with suppliers; 
  • The number of disputes of the business with suppliers; 
  • Estimated savings vs. Actual savings – the percentage of realized or actual savings against the negotiated agreement vs the estimated savings that were determined during outsourcing initiative of the business;
  • Percentage of suppliers being screened for human rights – the percentage of contractors and significant suppliers of the organization that have undergone a screening for human rights and for actions they have taken; 
  • Percentage of the invoices that are disputed 
  • Percentage of employee time sheets that require correction or validation by employees



What if the HR outsourcing in UAE is put to a halt and the contract gets terminated? When considering outsourcing HR functions to an expert, it’s important for an organization to plan the possibility of reverting some services back into the company. We suggest a business to add a framework in a contract for HR outsourcing for bringing certain processes back into the company.

Key areas which are to be included in the contract are as follows:

  • A robust clause for transition support for the organization; 
  • The ability in reducing the services that are terminated gradually as the work is transitioned; 
  • Low termination fees

Call us at Payroll Middle East if you have questions and concerns!