This article explores HR outsourcing, what it is and how to know when it may be time to outsource your HR.
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Imagine you’re running a small business with just a handful of employees. It may seem like you have everything under control when it comes to hiring and managing your team. However, here’s the catch: HR is a specialized field that requires dedicated attention because HR helps the business grow through better people practices, and when your business grows, managing your staff becomes a complex task.
As your business expands, you will realize that you cannot juggle all of the day-to-day people management and recruitment tasks on your own.
What is HR outsourcing?
HR outsourcing is handing off some or all of your HR functions to a third party. This can be an alternative to hiring an internal HR professional or used in tandem with an in-house HR professional who handles some of your HR responsibilities. Outsourced HR services depend on the contract between you and the provider.
How do you know when it’s time to outsource your HR services?
If your HR tasks are not getting the dedicated attention they need or your company is growing and HR responsibilities are weighing heavily on you, then the solution is to outsource your HR.
Five Signs That You Should Outsource Your Company’s HR.
You spend too much time managing HR problems.
There is no escaping that, as a business owner, you have to take on many roles in addition to providing the products or services for which you created your business. However, HR problems can be time-consuming, taking away from revenue-generating activities.
The more time you spend trying to learn about employment law, the less time you spend doing what your business does. When you outsource your HR, you pay someone else to deal with your HR tasks and you free up more time to work on your revenue-generating functions.
You are worried about or have experienced liability exposure.
An HR professional will have a keen understanding of where you could face liability in your hiring or managing practices. If you outsource your HR, you have the assistance of someone trained in the practical and legal aspects of HR.
You need to save money.
Outsourcing HR offers savings in many ways. For one thing, when you outsource your HR, you gain the expertise of someone you don’t have to train or provide with benefits. You avail yourself of that HR person’s organization and its services.
When you have a competent HR consultancy handling your company’s HR responsibilities, you spend money, but you also gain time to devote to your core business functions and reduce your exposure to legal risks and financial repercussions. The overall effect is a healthier bottom line for your business.
The HR lines of accountability are not clear in your business.
If your HR functions are allocated among managers and department heads, you may get all the HR tasks done, but you may be blurring the lines of accountability too. Employees might not know where to report a problem, managers may be unsure if they are passing along the correct information and some HR tasks may get lost in the shuffle.
Outsourcing your HR means that your managers and department heads can focus on their departments without worrying about HR responsibilities and you can be confident that you won’t face legal problems related to the haphazard allocation of HR responsibilities.
You can’t respond to changes as quickly as you need to.
Businesses have to be nimble and responsive to change. When a great opportunity comes along, you may have to find and hire employees quickly to meet your obligations and fuel business growth.
When you outsource HR, you have many more resources at your disposal for finding and hiring the individuals you need quickly. Losing an opportunity due to an overworked HR manager who suddenly has new hiring tasks on top of everything else gives the advantage to your competitors. Outsourcing HR is a great way to keep your business flexible and responsive to new opportunities.
Which HR functions can be outsourced?
Employers can choose to outsource all of their HR needs or opt for partial outsourcing of specific tasks. The type of outsourcing you need depends on whether you can fulfil each service on your own.
Here are some of the most commonly outsourced HR functions:
- Administrative HR functions, such as creating employee handbooks, implementing HR policies and terminating employees
- Recruiting and onboarding employees
- Conducting background checks
- Employee benefits administration
- Managing and processing payroll
- Legal compliance and risk mitigation
- Employee training and development
- Performance management
Visit our Human Resource Services page for more on the HR services we offer.
Article source: business.com