Top 5 Reasons Why Outsourcing HR is Your Best Option Today
Many businesses are faced with the decision as to whether or not to outsource certain business functions, including but not limited to Human Resources. Below are the top 5 reasons why outsourcing HR may be the best option for your business as opposed to keeping or bringing this position in-house.
1. You May Not Have Enough Human Resources Needs
Depending on the size of your business, specifically headcount as opposed to revenue, you may not have enough human resources work to justify paying for a full-time employee. We have found that outsourced HR typically works well for employers with fewer than 80 employees. There are some outliers, as we have worked with businesses with over 80 employees where there wasn’t much day-to-day HR interaction (i.e., not a lot of employee relations issues, low turnover, easy payroll, simple benefits) or the company had a part-time or full-time employee who handled more of the administrative aspects of HR, and we took on the managerial/director level tasks. Many businesses have under 80 employees and most under 50; however, just don’t have enough regular HR work to justify paying for a full-time, or even part-time, employee’s salary and benefits.
2. It’s Challenging to Stay On Top of Changing Regulations
If it seems to you like the world is changing overnight as you are sleeping, that’s because it is. Every time we turn around, there’s a new regulation on sick leave, parental leave, COVID guidelines, etc. and these regulations impact businesses differently according to the number of employees, revenue, industry, state, and sometimes even city. While any HR employee should be staying on top of these changes, outsourced HR companies market their services and build their reputation by keeping clients abreast and in line with regulatory changes. It’s a good firm’s bread and butter, so outsourced HR providers typically allot the dollars and internal resources to make sure they are on top of, and in many cases ahead, of the change curve. It is music to many business owners’ and CEOs’ ears (and that of many internal HR support staff) to know they have a team they can count on to help them stay in compliance.
3. Outsourcing HR Allows You to Focus on Your Strengths
The bulk of our clients (again, there are some outliers) are growing, entrepreneurial, independently-owned businesses where the executives, business-developers, and managers did not study HR, nor is it their strength (or quite frankly, their passion). Instead, their greatest contributions to the organization, and where their attention should be focused, are in other areas, such as leadership, negotiation, finance, sales, production, etc. Yes, HR connects to all of these functions; however, these roles are not in and of themselves human resources. By outsourcing HR, businesses can focus on what they do best and invest and capitalize on their strengths instead of getting bogged down in HR.
4. Outsourced HR Provides a Breadth of Knowledge to Your Business
Remember the phrase, “No man is an island”? It means that no one is truly self-sufficient, that only through relying on others do we thrive. This is one of the reasons outsourcing human resources can give your business an advantage. Many in-house HR employees have held a handful of jobs, which come with it, a certain number of experiences. In our years of supporting clients, we have helped hundreds of varying size, industries, and locations. This has afforded us an extensive breadth of knowledge and expertise that can come only through hands-on experience. When we work with a client, we are able to give them not only Best Practices but a number of options, pros, and cons, that we have seen in practice, in the real world. This enables them to make decisions around compensation, benefits, recruiting, performance management, etc. that are best for their business.
5. Outsourced HR Gives Your Employees an Objective Resource for Support
Many businesses have a close, familiar feel and while that can make for a comfortable/laid-back work setting, it can also blur boundaries and create an environment where employees feel they don’t have an objective resource to turn to. For this reason, companies often choose to outsource certain areas of HR, such as complaints, investigations, and training, so that employees have an outside resource they can trust (and so managers are shielded from knowing their employees’ private and sensitive information).
While outsourcing HR isn’t right for every business, it can be an added benefit and resource for your company, enabling you to maintain your staffing budgets, stay on top of changing regulations, focus on your strengths, select the best policies and procedures for your business, and provide your employees with an objective resource for support. For more information or to discuss whether or not outsourcing HR may work for you, please contact us at 732-534-7844 or email@example.com.