Get expert advice on every topic you need as a small business owner, from the ideation stage to your eventual exit. Our articles, quick tips, infographics and how-to guides can offer entrepreneurs the most up-to-date information they need to flourish.
Is it time to outsource your HR? Ask yourself these 4 questions
Posted by Grace Townsley
February 17, 2023
Outsourcing your human resources (HR) services, like payroll processing, benefits administration, labor law compliance, employee relations, and recruitment is one way to almost instantly improve the efficiency of your small business.
Outsourcing your HR services can save busy business leaders countless hours that would be otherwise wasted on draining administrative tasks — tasks which an HR expert could complete in minutes, with greater accuracy. And outsourcing specialized HR services, like benefits administration, minimizes the risk of non-compliance or administration errors that a less experienced office manager or business leader may make.
Plus, outsourcing tedious and repetitive HR tasks, like payroll, can help you avoid mistakes that cost you and your employees money.
Curious if your small business is ready for outsourced HR services? Ask yourself these four questions:
1. Do we have the expertise needed to handle HR ourselves?
If you or your staff don’t have HR expertise, or if you’re struggling to keep up with the latest HR regulations, it may be time to consider outsourced HR services. After all, an HR mistake that leads to legal consequences, compliance fees, or extra paperwork is almost guaranteed to cost your small business more than outsourcing these services!
An experienced HR provider can offer your small business the expertise and guidance needed to stay compliant with the latest regulations. They have the ability to manage your HR tasks quickly and effectively, reducing the time spent on each task and the chance of errors.
2. Do we have the time to keep managing HR?
The second question to ask yourself is if your internal team has time to manage your essential day-to-day HR tasks.
If you find that HR tasks are taking up too much of your time, or if your staff is struggling to balance HR tasks with other business priorities like sales and growth, outsourcing may be a good solution. A dedicated HR specialist, even one who only serves your company a few hours each week, can lift the load for your internal team.
Outsourced HR services, like payroll processing, benefits administration, compliance, and onboarding reduce your team’s workload and allow them to focus their efforts on tasks that propel your business forward.
3. Are inefficient HR processes bringing us down?
If your HR processes are inefficient or outdated, outsourcing may be a good way to streamline these procedures and improve efficiency. Your outsourced HR specialist can help you identify areas for improvement, and implement best practices to streamline your HR operations.
Outsourcing your HR services also gives your small business access to innovative HR tools you might not otherwise have been able to afford. Payroll automations, applicant tracking systems that streamline the hiring process, learning management systems for employee training, and performance management software are all examples of tools HR experts can use to improve your small business.
While you may not have the budget to purchase each of these tech tools, or the knowledge to use them effectively, your outsourced HR team can leverage the best tools for each process — further improving your overall efficiency.
4. Is my small business growing?
If your business is growing rapidly, it may be challenging to keep up with HR tasks such as recruiting, onboarding, and benefits administration. These tasks may be minor inconveniences now, but as your team grows, so does your HR responsibility.
HR tasks have a way of increasing exponentially. Each new hire brings with them a growing need for payroll processing, benefits administration, compliance paperwork, onboarding processes, training needs, performance reviews, and more. And without a dedicated, experienced HR expert in place, you can quickly find yourself in over your head.
Outsourced HR services, on the other hand, scale with your team. Today, you may need a few hours of HR support each week. But a year from now, you may benefit from a full-time outsourced HR specialist with a whole team behind them, dedicated to helping your company grow.
Many small businesses wait until it’s too late — and pay the consequences
Small businesses put off outsourcing their HR services for reasons like cost, fear they’ll lose control of their business operations, or a lack of time. But the very reasons that hold you back are the factors that make outsourcing your HR services one of your most valuable business decisions.
Outsourced HR services can often be more cost-effective than hiring a dedicated HR staff. And the compliance and payroll mistakes your dedicated HR specialist can help you avoid more than cover the cost of their services.
If you’re concerned about losing control of your business operations, remember that your on-demand HR expert actually provides greater visibility into your HR operations than an office manager with HR experience ever could. HR agencies offer the highest level of skill, compliance, transparency, and reporting.
And if you’re struggling to make time to vet outsourced HR services, that’s one of the biggest signs it’s time to make a plan. You don’t have time and money to waste on tasks that could be delegated to your experienced HR specialist.
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 please contact us here.
As a professional copywriter in the finance and B2B space, Grace Townsley offers small business leaders big insights—one precisely chosen word at a time. Let's connect!