Outsourcing Your HR Processes: Things to Consider  

When you’re a busy small-business owner, or the manager of a larger organization, it can be tough finding the time for you and your team to get every task done each week. This can be the case for human resources processes, particularly when you don’t have the budget to hire experienced and qualified workers to concentrate, internally, on areas such as hiring and promoting employees, payroll, terminations, and attendance tracking.

As such, it often pays to choose human resource outsourcing so that an external firm can handle these tasks for you. To help you take this key step, read on for the lowdown on what you need to consider about HR outsourcing today.

Reasons to Outsource HR Functions

There are multiple reasons why businesses choose to outsource some or all their HR functions. For example, time, as mentioned above, is typically the big one. If you don’t have dedicated HR staff on your team to handle the processes involved with hiring, managing, training, hiring, and otherwise looking after staff members, it can be impossible to find the time to do all the related jobs correctly and effectively.

Many small to medium-sized businesses have a committed HR person on their team, but when this person gets inundated with work, some select functions can get outsourced to lighten their load, and allow them time to concentrate on the most-important jobs, or those they’re best at.

Companies can also choose to outsource PR to save money and/or stabilize costs (for example, it can be cheaper to outsource the work rather than hire a full-time staff member in house); and to comply with the law and reduce the risk of facing legal or tax-related penalties for accidental non-compliance.

Pros and Cons to Consider

The main benefits of outsourcing HR jobs are mentioned above – namely, time savings, cost savings, reduced risk. In addition, keep in mind that team members with little experience in handling HR can become more productive when time-consuming or difficult tasks are outsourced to people who are specialists in the area. Handing off tasks can reduce stress levels for business owners, managers and employees too, if they struggle to understand how to handle tasks, or to fit them into their schedule.

Company efficiency can be improved through HR outsourcing. Having one specialist firm take care of all the paperwork and various jobs involved in HR functions reduces the risk of errors or time-lags occurring as different people wait for different tasks or forms to be completed.

As far as the potential downsides of outsourcing go, consider the fact that you do need to choose a reputable, trusted firm so you can feel secure knowing everything that needs to be done does actually gets handled, and within a timely manner. Have regular meetings with the firm you outsource to so that you can ensure everything is in order.

As well, read over a contract carefully before you sign it, so you can ensure it’s flexible enough to allow you to review the contractors’ performance regularly and to modify terms or to cancel the contract completely if needed. Some HR outsourcing firms can get incredibly busy too, which sometimes mean they take longer to answer your or your team’s questions and inquiries about benefits, pensions, payments, and other topics.

Outsourcing HR can also potentially mean there’s less face-to-face time between human-resources people and company staff members, which sometimes leads to issues not being spotted as quickly as they might. This all comes down to what functions you outsource though, and who is handling the tasks and how.

How to Select the Best Company for Your Business

When it comes to selecting the best company for your business, always research a wide variety of vendors and make a shortlist, based on the services provided, track record of the firms, and their fees. Know your goals and what tasks you’d like handled before you start searching for a company, and always speak directly to some of the current and past clients of your shortlisted firms to ensure they really are as good as you need them to be. Also, see if firms have the right credentials, if they’re part of relevant associations, and if they’ve ever won any awards for their work.

If you want to start by hiring a company to handle limited tasks to start with, but then plan to potentially engage them for more later, make sure you choose a business with the capacity to handle all your future needs. It also pays to get some guarantees put in your contract, such as that tax payments and paperwork lodgements will be done on time, and that you’ll receive up-to-date reports every week or month, etc.