Many small to medium sized businesses feel the frustration of the commitment needed to maintain appropriate administration, conformation to statutory regulation and keeping on top of employee contractual responsibilities.
From performance management, personal development, ongoing coaching, changing contractual nuances, payroll and to benefits & compensation, business leaders can spend a significant proportion of their day engaged in these and similarly important but time-consuming tasks.
Something to consider is the outsourcing of part or all of their HR functions to third party providers so that they can focus on their core business.
Outsourcing gives easy, quick and on demand access to scalable:
- skills and knowledge
- better quality support than the business is able to be offer in-house
- cost saving over trying to keep an inhouse team current and fully utilised
Many of the regulatory and administrative HR tools and documents can be readily produced and maintained through a third party portal or outsourced service with advice and support on hand as an ‘on-demand’ service either on-site or remotely.
So, who should outsource . . .?
Typically, businesses with fewer than 50 employees rarely have an HR team. Instead they may have a manager or finance director who dabbles in HR because they have some relevant experience in their dim and distant past which seemingly qualifies them to deal with all the people issues that arise. As a rule of thumb, larger organisation than this will often find it easier to have an in-house HR department and therefore, though they may still require outsourced HR support, the nature of that service may differ greatly from that utilised by the smaller business. Something to think about when choosing an outsourced HR service provider is their ability to help your business grow and when the timing is right help you in-house key HR leadership and services.
Is it a full time need or on demand ‘emergency service’ . . . ?
In choosing to outsource some or all of your HR service think carefully about cost and the real benefit to your business. You may, with some easy initial guidance, be able to manage without a full time HR outsourced service and just plug into an emergency style help portal or onsite presence on a pre-determined daily rate. If this is the case then the more time spent up front by the HR service provider to understand your business the better (and more cost effective) it’ll be longer term.
When to ‘hit’ the outsource button . . .
As a generalisation, when administrative processes begin slowing down the productivity of the firm and you can’t keep on top of staff issues or need to up-lift your monthly performance reviews, this is the time to consider outsourcing the management of your human resources. Good employee relations are not simply "nice to have" but important to get right as they can directly affect the future revenues of your business.
Prioritise employee engagement! This will ensure you are not burdened by high employee turnover, low morale or ineffective teamwork. Instead you will have employees who are productive, enthusiastic and effective, enabling you to maintain an edge in a highly competitive environment. The attraction and retention of talent is now such a business-critical operation that for many businesses, outsourcing their HR function is the best way to ensure that what is arguably their most valuable asset is well managed, freeing them up to concentrate on their core business. A good outsourced HR service will also help with Talent Acquisition, driving down or eliminating recruitment agency costs and raising your profile locally as an employer of choice, something that will promote your business in more than just attracting talent!
If you’ve enjoyed our article, are thinking about outsourced HR, or would like to submit an article yourself please get in touch at: This email address is being protected from spambots. You need JavaScript enabled to view it.
Regards, Simon Raitt
