HR outsourcing involves hiring a separate company to handle all or some of your human resources tasks. It allows you to concentrate on growth-related activities rather than spending time and money on HR functions that don’t contribute to revenue growth.
It’s a full-time job keeping up with federal and state employment laws, let alone managing your employee roster and benefits. Here are five reasons to consider hiring an HR outsourcing partner:
Save Time
Human resources is fundamental to every business. However, the administrative tasks associated with HR, like payroll, employee onboarding, and managing insurance, can take time away from essential growth-related activities. It is especially true for small organizations that need more resources or staffing to oversee an on-site HR team.
The best way to ensure your team has the time and attention it needs is to outsource these tasks. Partnering with a third-party human resources outsourcing services allows you to delegate the administrative burden of human resources to someone else while still being able to meet more immense, more long-term goals.
You can hire a single-source outsourcing firm or work with a professional employer (PEO). PEOs offer full-service contracts that include workers’ compensation, risk management, and payroll administration, among other services. However, you may lose some control over certain functions if you hand these responsibilities over to a PEO, as they might make decisions without your approval. If this is an issue, find an HR firm that includes on-site visits in their client contracts. It will allow you to communicate directly with your partners and remain up-to-date on changes.
Save Money
HR tasks like setting up policies, creating payroll, and determining worker’s comp coverage require knowledge that only comes with years of experience. It makes them difficult for non-HR personnel to perform, and even one mistake can cost your company thousands in penalties or lost revenue.
However, outsourcing your HR functions to a professional employer (PEO) or administrative service organization (ASO) can significantly reduce overhead costs. Big businesses may employ economies of scale to give you excellent services at a much lower price.
In addition, many HR outsourcing services offer various customer support options to accommodate business owners with nonstandard work schedules or who prefer different communication methods. For example, TriNet’s multiple support channels—including phone, email, text, instant message, and a self-service portal—help employees and employers get the help they need when needed.
Many HR outsourcing services also offer training resources to improve employee performance and compliance.
Give You Peace of Mind
One of the small businesses’ biggest worries is that they’ll need to correct their handling of HR tasks like establishing employee policies or creating a payroll. It could cost the company thousands in fines or lost revenue.
However, when you outsource these tasks to an HR service provider, you can rest assured that your business won’t be fined for making a misstep. HR professionals have years of experience and know the ins and outs of compliance rules and regulations.
You can even take it further and work with an HR firm that works exclusively with small businesses. These firms often have a higher level of expertise than larger companies. They can provide personalized one-on-one support and customized solutions for your unique business needs.
There are several types of HR services that you can outsource, including Professional Employer Organizations (PEOs), shared service providers, and administrative services organizations. A PEO typically manages employees along with clients and handles all traditional HR tasks, while a shared service provider provides essential administrative services on a contract basis.
Help You Stay Compliant
To the extent that federal and state laws may impact the business, HR professionals must keep up with these laws. These laws often involve privacy issues that require special care and attention. HR outsourcing firms also ensure compliance with tax requirements, like payroll taxes, by providing timely notifications and ensuring the company meets deadlines for liabilities.
Outsourcing HR services is an excellent solution for small businesses that can only afford to hire part of the in-house team. By partnering with an HR outsourcing firm, you can save money on salaries and training costs and redirect your team’s time to growing your business and increasing profits.
The exact moment you should outsource HR functions can vary depending on your business. Still, the need usually arises once the breadth of HR responsibilities becomes more than you or a non-HR specialist can manage alone. If you don’t outsource early, your company could face legal ramifications. HR outsourcing firms can offer support for everything from employee onboarding to grievance resolution, and most of these companies are available to you via phone, email, instant messaging, or a web portal.
Save You Stress
When it comes to HR, there are numerous moving pieces. It’s a complicated field that requires a deep understanding of federal, state, and local regulations. A mistake or misunderstanding could lead to severe penalties and even lawsuits. Outsourcing your HR department to an experienced third party will give you peace of mind knowing that all the details are handled correctly.
If you’re looking for an HR outsourcing company, do your research first to ensure they are reputable and qualified. Look for testimonials, reviews, and references from previous clients. Once you’ve found the right fit, your new partner can take over all administrative duties of managing employees, such as payroll processing and employee benefits management.
Outsourcing can be a game-changer for small businesses struggling with time and money. It can also help them focus on more important things, like growing their business.