HR Innovation, HR Management

Now that we know what HR is, how do you outsource it? And why would you? Part 3

There are any number of reasons a company might choose to outsource its HR function. Most often, clients come to HR Affiliates either when they’ve reached an employee headcount they believe warrants more diligence, or they have a pain or struggle they need help with right away. Regardless of the reason for the initial call, companies discover the primary advantage of HR Outsourcing is having access to expert advice and an HR relationship they might not otherwise be able to afford as a small company. This includes compliance management to put a business owner’s mind at ease, as well as having a trusted partner to address all employee issues from hiring to firing. Here’s how HR outsourcing can do this:

1. HR Outsourcing provides a full HR department of expertise.

Most small to mid-size businesses either have no in-house HR, or they have one person trying to do it all. Unfortunately, even small businesses discover that managing all the functions of HR by a single person is a big job and it’s unlikely that they will be able to afford the salary of an individual who can provide VP level expertise (and who is also willing to process payroll). By outsourcing HR, companies can access the talent and bandwidth to fulfill all HR needs, whether they are administrative or strategic, including operational strategy, compliance, technology, recruiting, payroll, employee relations, training, benefits, and more.

When you outsource your HR, you are ensuring that each HR function is managed by a highly capable HR expert who specializes in their area of expertise. Outsourcing HR elevates the quality of the HR you are offering to your company and employees.

2. HR Outsourcing helps companies grow faster.

Growing a business requires good practices that can be replicated and quickly put into motion. You need a to be able to plan and forecast talent needs, recruit people, onboard them, train them, and manage them over the long term. Outsourcing HR can help develop and streamline these processes resulting in more effective and efficient management that is scalable as the company grows.

Additionally, if these growth plans involve multiple sites – or multiple states – there are significantly more laws and best practices to navigate. Not only do you have to understand employer requirements in every state and follow the laws applicable to do business in those states, but you must also figure out how to hire, onboard, and train in each of the states. Once you’ve onboarded your new hires, you must manage all these teams remotely and communication management becomes all the more important.

3. HR Outsourcing helps companies stay compliant.

In HR you often hear it said that “You don’t know what you don’t know,” especially when it comes to compliance. Even the most business savvy entrepreneur can find themselves in a tough spot because of HR compliance that is not on their radar. Federal, state, and local regulations are constantly evolving. Most small business owners don’t have the time or the support to keep up with the constant changes, however, that doesn’t make them any less responsible.

4. HR Outsourcing improves employee relations.

This may seem counter intuitive. How could having a third party involved help your employee relations? No matter how great a rapport you have with your team, employee relations is still heavily regulated (there are risks for not doing it right). Whether it’s chronic absences or performance management or two employees that don’t get along, employee relations are complicated. There’s a delicate balance of advocating for the employee and doing the right thing while still making sure the company is running and mitigating its risk. Hopefully, you won’t have to deal with many employee relations issues, but when you outsource your HR to experts, odds are that they have dealt with this issue before.

5. HR Outsourcing helps streamline technology and vendor relations.

One thing HR Outsourcing can do is evaluate organizational needs and put together a technology resource to fit the company. Companies could do this on their own, but it would be without the experience and knowledge of those who have done it before, limiting their organization, replication, and cost savings. Your outsourced HR team will become the liaison between the company/employees and all benefit and payroll vendors assuming the administrative tasks that can take up a significant amount of your time.

6. HR Outsourcing saves time.

Considering all the different functions that are included in HR, it’s not difficult to imagine how much time it takes to manage all administrative responsibilities. If you do not have any HR staff, these tasks are taking time away from your other business functions. When you outsource these responsibilities, you free up your staff for time spent in their areas of expertise. This allows you and your team to focus on what you do best, which is running and growing your company.

If you missed it, please click here for Part 1 and Part 2 of our 4-part series.