Why every growing startup should prioritize hiring an outsourced HR consultant now

Growing a startup is a monumental task, even with a team of experts on your side. But if you’re still handling HR on your own — or if your HR department is as green as your startup — bringing in professional HR outsourcing services can benefit your growth and development.

Outsourcing your startup’s HR services from the earliest stages helps your team avoid the kind of common personnel missteps that stunt the growth of young businesses around the world. Skills mismatch, unnecessary hiring, compliance issues and wasted time are all consequences of operating without an experienced HR consultant in place. 

But with the right expert guiding this essential department, your business can be positioned for success from the beginning. 

Outsourced HR services can benefit your startup by:

1. Keeping you compliant

As your startup grows, the employment laws and regulations that apply to you may change faster than you can keep up with. The laws that apply to a company of just 10-20 employees are different from the ones that apply to big offices with 100+ personnel working together. 

And regulation enforcement agencies don’t accept lack of awareness as an excuse for noncompliance. An HR consultant will help your startup navigate the complex landscape of labor regulations to ensure you remain in compliance with any new laws — reducing your risk and giving you peace of mind. 

2. Improving talent acquisition

A startup is only as good as its top talent. And at a time when about 4 million workers are switching jobs each month, the right HR consultant and outsourced HR service will understand how to help your startup snag top talent the moment they’re ready to transition. 

They have access to the proper channels where these potential employees look for opportunities, and they know how to make the right connections that will benefit your business. Not only can an HR consultant find top talent for your startup, they can help you avoid attracting the wrong talent. 

As many as 36% of 1,400 executives in one hiring survey admitted that after performance issues, a poor skills match was the top factor leading to a failed hire. As the cost of acquisition increases, that’s an avoidable mistake that becomes even more expensive. 

While a business owner’s talent acquisition strategy may rely on research, referrals, and instinct, an HR consultant will develop a calculated targeting strategy that positions your opportunity in front of as many high-quality applicants as possible. They’ll clearly define your company’s goals and values, work to find applicants who have similar and complementary values, create effective job descriptions, manage the influx of applications, and even pre-screen your candidates. 

That adds up to significant savings of time and energy, while attracting the kind of talent that will position your startup for harmonious growth. 

3. Helping retain your most valuable talent

It isn’t enough to simply attract high-quality workers. Fast-growing startups must maintain their employees or risk losing their thin competitive edge. But it’s difficult to double your workforce and experience meaningful growth if you’re constantly racing against a poor talent attrition rate. 

According to a study by The Circle, a leadership community for growth-stage startup executives, in 2022, 60% of companies were facing voluntary attrition rates of 11% or more. Many of the companies surveyed were Series B to D+ startups with big talent acquisition budgets and healthy incentives. 

This sobering startup statistic shows how crucial an involved, outsourced HR service is to the growth and success of early-stage startups that don’t have the benefit of offering significant sign-on bonuses and unlimited PTO. 

4. Serving as a liaison between leadership and support staff

In the thick of high-speed growth, business leaders don’t have time to get caught in the middle of conflict and disagreements. But it’s impossible to avoid conflict altogether, especially as your staff size increases. 

An outsourced HR service can provide your startup with unbiased guidance, both for leadership and staff, to handle disputes and conflicts in a way that’s both fair and equitable. They can even offer advice on disciplinary procedures, conduct performance reviews, and manage the termination of employees — and the potential legal details that follow. 

5. Improving organizational efficiency

Perhaps the best and most important benefit of outsourcing your startup’s HR services and bringing in a consultant is a major improvement to company-wide efficiency. 

A startup that hires HR outsourcing service early on will benefit from increased organizational efficiency through the professional’s comprehensive HR strategy that impacts nearly every area of business — including the talent it attracts, the wages it pays, the workforce growth it achieves, and the training it delivers. At every level, your HR consultant offers efficiency improvements that impact the future of your startup. 

As efficiency improves, so does job satisfaction, morale and margins. Employees are better prepared to fill their roles, the startup can avoid some of the most common (and crippling) growing pains that come with personnel issues, and the startup can enjoy a stronger ROI on every employee it hires. Each of these far-reaching benefits stems from working with a knowledgeable professional dedicated to your startup’s growth and success. 

This material has been prepared for informational purposes only. Escalon and its affiliates are not providing tax, legal or accounting advice in this article. If you would like to engage with Escalon, please contact us here.