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5 Advantages to Outsourcing your HR

Posted by Tasnim Ahmed

May 11, 2020

Your business may be growing swiftly, but perhaps it isn’t quite big enough yet to justify an entire human resources department. Whether or not you have HR experts on staff, it’s still essential for you to stay up to date on employment and labor laws, benefits administration, onboarding new staff members and the myriad other responsibilities required of a thriving business. One way to ensure that these tasks get handled the right way from day one is to outsource your HR.

If you’re weighing the pros and cons of potentially outsourcing your HR function, consider these five advantages that many businesses experience after taking the plunge.

1. Significant Cost Savings

One of the biggest advantages to HR outsourcing is that you’ll end up saving a significant amount of money. If your business only needs 10 hours of HR assistance a week, then you can pay just for that amount of time. When your company gets bigger and needs additional resources, the outsourced team can grow with you. You’ll only pay for what you need, while still remaining compliant.

In addition to saving money on staff salaries and office space, you’ll also find that you face fewer expenses in terms of hiring and training, technological equipment and software and continuing education courses. The HR consulting firm takes these costs into account when it determines what to charge your firm for handling these responsibilities, and you pay them and then leave the work to their side.

2. Strong Focus on Compliance

Employment and labor laws change constantly, and go far beyond taking the right taxes out of an employee’s paycheck. You’ll have to stay on top of every-shifting rules around hiring contractors, family leave regulations, domestic partner laws, benefits requirements and much more to ensure that you are always in compliance with the local, state and federal laws.

Of course, an in-house HR team can handle this responsibility, but it takes a huge commitment to ensure that your staff members are always on top of the latest changes amid their other responsibilities. Outsourced firms can remain compliant with the law and advice you what you might need to tweak or change to stay in line with any new regulations.

3. Technological Advantages

Most outsourced HR companies will put your HR tools in the cloud, which allows you to access any records or documents you may need at any time. The shared drive will keep everyone on the same page while also modernizing your system, which may have been on an employee’s computer in the past.

In addition, HR outsourcing firms can create online benefits portals for your employees. These give staff members the information they need at any time about company policies, benefits rules, time off requests and much more. Employees can log in, find the information they need, fill out forms, ask questions and more, at any time, day or night.

4. Creating Streamlined Processes

 Not every small business has employee policies written out for staff members to reference, but an outsourced HR firm will help you create employee manuals so everyone knows the regulations and processes. Not only is this a good practice for any business, but it’s also required by law that you notify staff members of certain rules, regulations and rights. By putting this information in writing, you are compliant while also giving staff members the information they need.

5. Increased Efficiency

If you’ve ever worked in the HR field, you understand the reality of the job. Just as you’re working on creating a new benefits policy, someone calls with an urgent request to work on a performance review for an underperforming employee. Interruptions like this can significantly reduce efficiency in your office and damage productivity. By outsourcing the HR function, your staff members can focus on the important tasks that allow your company to grow.


Tasnim Ahmed
Tasnim Ahmed

Tasnim Ahmed is a content writer at Escalon Business Services who enjoys writing on a multitude of subjects that include finops, peopleops, risk management, entrepreneurship, VC and startup culture. Based in Delhi NCR, she previously contributed to ANI, Qatar Tribune, Marhaba, Havas Worldwide, and curated content for top-notch brands in the PR sphere. On weekends, she loves to explore the city on a motorcycle and binge watch new OTT releases with a plateful of piping hot dumplings!

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