Small Business Management: Why You Should Outsource HR Services

Whether you own a small business or run a large corporation, human resources are a fundamental feature for successfully managing and growing a company. The HR department plays a significant role in the management of employees, from the early stages of recruitment to training and payroll. However, not all companies have the resources to fund a fully-fledged HR department. For many small businesses, outsourcing HR services is an ideal solution with many benefits.

Types of HR Services

HR covers many aspects of a business. As a business owner, you can choose to partially or completely outsource your HR services. Here are a few common HR functions which small businesses choose to outsource.

• Background checks, recruitment, and onboarding
• Training and performance management
• Payroll services
• Healthcare benefits
• Employee relations; such as grievances, dismissals, and complaints
• Retirement planning and redundancy

Outsourcing all elements of your HR functions to an external provider relinquishes a huge aspect of your business. This allows you to spend more time and resources on other parts of your business. One of the HR consulting firms Chicago which companies prefer is G&A Partners. They provide customized solutions to help small businesses manage their HR needs.

In-House HR

There are many facets to human resources in a business, and HR services require a lot of manpower and focus. This is especially true if your small business is growing in numbers. A larger workforce requires more HR attention. HR personnel needs to be able to cover all of the services listed above and potentially more. Even if your small business has an existing HR employee, they may not be able to deal with all the functions. Covering all aspects of HR in a satisfactory way can be difficult for a small HR team which means that you will need to hire more skilled staff for coverage. According to the U.S. Bureau of Labor Statistics, the median annual wage for a human resources specialist is $61,920 per year, while the median annual wage for an HR manager is $116,720 per year. Hiring an entire team is simply unachievable for some small businesses.

Additional Help

Outsourcing part of your HR services can streamline your existing processes. By outsourcing a function that takes up a lot of time, your existing HR personnel is able to work more efficiently on their everyday duties. Outsourcing is also a great way to ensure your HR department gets the manpower, resources, and support they need if they are faced with a sudden influx of work. In addition, small businesses looking to add new functions to their company can do so by outsourcing the work initially. This will give you a taste of what it will be like with this new function without having to commit to anything.

Cut Costs

Maintaining a fully functioning HR department requires a large number of resources. Unfortunately, a number of small businesses simply do not have the means to fund an in-house HR team. This is why many business owners turn to HR outsourcing. Not only will outsourcing save you from paying out large sums, but it will also save you valuable office space and general overhead costs. Hiring an in-house team means that you will have to not only pay for salaries but you will also have to put aside capital for taxes, benefits, and other costs. In addition, you will need an office large enough to fit all of your HR employees.

Time Efficiency

HR management involves many services, which include the added extra of administrative duties and endless paperwork. When done internally, this can drain a lot of time. Outsourcing HR services, such as employee relations and payroll, can free up time and allow your team to focus on other parts of the business. Both you and your team’s attention can be redirected towards business growth and profitability.

Reduce Risks

With unexpected legislation changes and regular service updates in the business world, it can be difficult for small businesses to keep on top of rules and regulations. If your business is unable to abide by strict regulations, it runs the risk of non-compliance, which can result in heavy fines and serious penalties. It can also seriously affect your employees too. Outsourcing your services to a provider who specializes in human resources can help you reduce and manage business risks. HR consultants make it their business to stay abreast of the ever-changing laws and services in the market. Outsourcing HR will ensure your small business remains compliant, and it can help you protect your colleagues too.

Experts in the Field

Outsourcing your HR services to an agency that specializes in the field of human resources ensures that only experts in the field handle your HR needs. HR consultants specialize in all areas of this industry, so you will not have to worry about the quality of the work. External HR service providers also have advanced processes in place to offer excellent service for their clients. This means that your HR functions will be handled efficiently and effectively by HR experts who use a specialized system.

Stay Up to Date

With so much to think about in a small business, staying up to date with methodology and specific HR technology can be tricky. Outsourcing your services to a third party will ensure your business stays ahead of the game. Your employees will benefit from the latest software and technology managed by a professional HR specialist. In turn, this elevated level of support can increase productivity within your team.

Focus on Business Growth

It can be tempting to take on some HR services or delegate HR responsibilities to someone in a senior position as a small business. HR is a significant part of a company with many functions. But, by cutting corners, you risk decreasing productivity and lowering job satisfaction in your employees. Outsourcing HR services will enable you and your employees to focus on core business activities such as increasing profits and growing your company.