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When Should You Consider HR Outsourcing?

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When Should You Consider HR OutsourcingOutsourcing across all functions of business is on the rise. That’s what a 2016 survey of 280 executives conducted by Deloitte revealed. Following Finance is Human Resources with 32% of respondents planning an increase in that area over the next year.

Whether you’re a small company with no dedicated HR staff or a larger company with an over-stressed HR team, outsourcing some or all of your organization’s HR tasks may be in your best interest.

Here are a few reasons to consider it.

Top 3 Reasons to Outsource Your HR Needs

To Manage Risk:

All companies should take a proactive approach to effectively manage risk. In the dizzying world of compliance, it can be challenging to keep up with ever-changing employment and labor laws. Failure to comply can result in serious financial repercussions.

“HR is the one department that doesn’t make money, but minimizing risk potentially saves money,” explains Lisa Salcido, Balance Point’s Director of Human Resources who is guiding the roll-out of the new HR support service, BPHR.

As your business grows, so do the number of government laws in which you must comply. Knowing you have an expert on your side who is specifically trained in these areas can put your mind (and budget) at ease.

To Cut Costs:

According to the Deloitte survey mentioned above “Cost Cutting” was the number one reason to outsource, cited by 59% of respondents. In addition to having to pay salaries, a fully functional HR department requires office space which your company may not be able to accommodate.

Interestingly “Solve Capacity Issues” was the third most popular reason for outsourcing on the Deloitte survey with nearly half (47%) citing it.

Sometimes it just comes down to practicality. “Smaller companies may have HR needs infrequently and can’t justify an in-house hire. Outsourcing gives them access to an expert when they really need it,” says Lisa.

To Maintain Efficiency:

Maintaining a productive workplace is crucial to success. An outsourced HR consultant has a vast network of resources and tools at their fingertips to handle a wide range of HR functions quickly.

Advanced HRIS systems utilized by outsourcing providers can help streamline essential processes such as applicant tracking, performance management, attendance, compensation, benefits administration, scheduling, and more.

Outsourcing allows employers and managers to spend less time doing administrative paperwork and dedicate more time pursuing their organization’s overall objectives. Here’s where number two on the Deloitte survey comes in: 57% say they choose to outsource because it enables them to focus on their core business.

Questions to Ask Yourself

To determine whether or not your organization can benefit from HR outsourcing, ask yourself the following questions.

  • Do you have the time and resources you need to hire qualified employees and effectively onboard them?
  • Are you confident that your organization is in compliance with all labor laws?
  • Do you have enough time to handle the administrative work needed to maintain your workforce?
  • Are your HR needs consistent and steady throughout the year?
  • Is your company culture effectively communicated to your team and potential new hires?
  • Do you feel your HR efforts are strategically supporting your business’ long-terms goals?

Could your interview process benefit from some pointers? Balance Point recently unveiled BPHR, a human resources consulting service that ensures compliance, allowing you to focus on your business’ strategic growth. Learn more about the service here.

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