A human resources team is a valuable feature of businesses large and small, but small business owners often recognize how complicated, frustrating, and time-consuming the HR job can be. From creating job descriptions, interviewing, hiring and training new employees to administering payroll, overseeing and resolving disputes between employees and management, the role of HR and its responsibilities form a long list. Understandably, running an HR department can be a difficult job for a small to medium-sized business, and since HR does not directly produce revenue for the company, the added expense of staffing a department has many businesses now outsourcing their HR needs.
Should you outsource HR?
Would it make sense for your small business to outsource some of its HR functions? New businesses may want to wait a while to transition to outsourcing, as the priority should be to hire the right people to begin building your company. As your business grows and company operations increase, small business owners can then make decisions on outsourcing HR responsibilities. Outsourcing comes with some negative connotations, and some still see the practice as negatively impacting jobs, culture, and aspects of the economy. However, the outsourcing industry has changed considerably from several years ago and in 2018, it can be a benefit for small businesses to provide their best HR.
Advantages of outsourcing
Small business owners should consider the advantages of outsourcing HR, which include cost savings, increased efficiency and minimized risks. Outsourcing HR allows a small business to assign employee management responsibilities to specialized outside HR firms as opposed to having to hire an in-house team. These companies also provide advanced HR technology that streamlines benefits and payroll, allowing small business owner to focus on other pressing tasks. Lastly, an HR team can ensure your company is complying with ever-changing labor laws and regulations.
What HR tasks can be outsourced?
Outsourcing HR tasks generally fall into five common options for small businesses:
HR Consultant - Human resource consultants handle a variety of responsibilities and generally are outside experts who provide direction to a company’s human resources department.
HR Consultant Firm - HR outsourcing firms have the knowledge, resources, and means to assist with setting up your business with the best assets based on your HR requirements.
HR Software - HR software assists small business owners with recruiting and hiring employees, payroll, performance management, termination, and benefits supervision, in one system that gives legal HR compliance.
HR Service Provider - Better than HR software alone, an HR service provider can be an HR expert and ensure your business is labor law compliant.
PEO (Professional Employer Organization) - This prevalent option offers full-service HR outsourcing and functions like a co-employer of your employees. PEOs work best for small business, as they offer all the legally compliant benefits at one price, lower than it would cost to hire a full-time HR person.
This article was written by Melanie Graysmith for Small Business Pulse