HR Management

The Cost Benefit Analysis of Human Resources – HR Affiliates Blog

To fully understand the Cost Benefit of your Human Resources Department, it is important to acknowledge what the responsibilities are at each level and who is accountable.

Transactional Level responsibilities frequently include daily functions as they relate to compliance adherence, payroll, employee relations, employee benefits and administration, and initial recruiting/hiring functions. Operational Level responsibilities concentrate on training, policy and procedure management, recruiting and selection, compliance implementations, records and report processing, performance management, and employee relations. Strategic Level responsibilities focus on succession planning, employee engagement, compensation and benefit planning, leadership development and organizational development.

Many tasks inherent in HR functions do not generate an income; rather they incur expense. Therefore organizations frequently cut costs by reducing their HR investment. However, the solution of re-assigning HR tasks internally may not be as cost cutting and efficient as it would appear.


Parceling out is not the same as outsourcing

If you are tempted to parcel out your HR responsibilities, here are a few things to consider. Adding an additional task to an existing employee’s full work load may lower your expense but it will often be at the price of expertise, work quality or efficiency. On the other hand, handing off such tasks as payroll and compliance responsibilities to your CPA or Attorney may increase the level of expertise but not necessarily lower your expenses.

Analyze your exposure

Whether it is staffing, payroll or general HR support, it is nearly impossible to be an expert at everything all the time. Each division carries responsibilities where mistakes are costly to the bottom line. In addition, fines, weak candidate pools and turnover, inefficiencies and outdated payroll practices, or failure to provide role succession planning all impact your bottom line in the very real form of dollars.

Know your internal expertise

Both underutilizing talent and overtaxing expertise can be costly decisions. Assigning duties that match expertise is the most efficient and effective use of in house talent. Those areas which are not adequately addressed with existing talent are often best served through outsourcing to professional agencies.


Staffing and Recruiting

Temporary Staffing can provide an almost immediate supply of candidates to engage before a final commitment is made in the hiring process. The bonus provided by “trying before hiring” insures that the choice is right for both candidate and organization. Permanent Recruiters bring excellent value by investing time and expertise conducting in-depth searches that include passive candidates often missed by job board postings. Since utilizing contingency based recruiters ties your investment directly to your new hire, your recruiter is committed to finding the best talent to meet your needs.


While there is an ever increasing set of choices to automate your payroll, make sure that your selection actually relieves tasks from your staff. Outsourcing agencies should provide and conduct the full range of activities for you including tracking PTO and Worker’s compensation. Make sure your monthly quote includes all necessary functions. If you find yourself working for your payroll outsourcing agency, it is time to look for a new resource.

Human Resources

Many organizations fear that HR Outsourcing requires eliminating current staff. HR Outsourcing should enhance your existing staff by providing expertise where it is needed. Make sure the organization you engage is customized to your company’s profile.

In short, HR plays a significant role in your business success. Understanding how to maximize the talents of your in-house staff and what areas are best outsourced increase profitability, proficiency, and production.

For assistance with any or all of your human resources needs, HR Affiliates, provides solutions.

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