7 Signs that You Should Consider Outsourcing Your HR Function

by: Neha

Business

HR is a function many companies prefer to keep in-house. Things like hiring and onboarding are very personal to an organization and some may not even be able to imagine handing these responsibilities over to a third party. However, there are cases where this ends up hurting them. They may not realize it, but many issues in organizations are caused by poor HR practices, and hiring an outside service can often be the only solution. Let’s take a look at a few signs that you might want to consider outsourcing your HR function.

You’re Spending More Time on Your People than Your Numbers

If you’re constantly out there putting out fires while simultaneously handling employee benefits or interviewing prospective employees, this is time you’re not spending on increasing profits. If that’s you, then it’s a clear sign that you should let someone else handle the job. You should focus on working on what you do best instead of trying to be everything at once.

You’re Having a Hard Time with Employment Laws

Employment laws change all the time and are difficult to keep up with. One error and you could find yourself in big trouble. If you’re relying on Google to find information about the latest changes, you’re asking for trouble. HR services have to know employment laws inside and out or their reputation will be ruined, so you won’t have to worry about missing a thing if you go with a reputable service. A payroll and human resources outsourcing service can also help you with things like time tracking, calculating deductions, and filing taxes, among others.

There’s No HR Accountability

One big mistake made by small businesses who don’t have dedicated HR personnel is distributing HR tasks among their department heads and managers. This causes task accountability to be lost since there’s no clear chain of command or proper communication channels. 

Your employees will not know who they should see when they have HR issues and your managers will have no way to know if the information that they relay is correct either. This is another thing you won’t have to think about when working with a dedicated team. You’ll also put much less pressure on your management staff and allow them to concentrate on their core tasks.

You’re Having a Hard Time Keeping Employees

Attracting and retaining employees is becoming increasingly tougher for companies. The problem is that many don’t know exactly why their employees are leaving. This can be very difficult to decipher if you’re handling HR yourself and don’t have the expertise.

Sometimes employees leave because they’re disappointed by the job. This might be because you misrepresented their role or the company in your job listings. Or maybe you don’t understand what building a culture means. These are all areas where working with a third party could help. 

Working with a professional team will allow you to attract exactly the type of candidate you’re looking for. They will also help you create a brand for you as an employer and build an actual business culture. 

Another issue many businesses run into is not knowing how to craft a competitive benefits package. Today’s crop of employees will not hesitate to move to a different position if the benefits package and employee experience aren’t up to par. An outsourced service will know exactly what should be in your benefits package if you want your employees to stay. This will not only reduce turnover but boost morale and engagement as well.

Another thing you should know about HR services is that they often have deals with providers because of the large number of clients that they work with. That could give you the chance to benefit from economies of scale and offer services and benefits you wouldn’t be able to otherwise.

You Need to Reduce Your Costs

Outsourcing will cost you money, but it will also save you money in so many ways. For one, you won’t have to spend time building an HR team, and you won’t have to spend money paying out their benefits. You’ll be able to hand over functions like payroll to someone else and free up some time in the process. When you hand over these responsibilities, you can also redirect your cash resources towards things that will directly benefit your bottom line. 

The fact that you’ll be able to retain more employees also means that you’ll have a more experienced and productive workforce. Constantly having new employees on the floor can wreak havoc on a team’s morale since experienced employees will have to pick up the slack for the new ones, and you can end up losing some valuable players as a result. Finally, working with an outsourced team will protect you from potentially costly lawsuits and fines.

You’re Not Flexible Enough

In this day and age, businesses have to be lean and be able to respond to change. This means that your staffing needs could change overnight and you have to be flexible. This isn’t something all small businesses with an unfocused and inexperienced HR function will be able to deal with. A dedicated HR team will be able to find top candidates in a fraction of the time it would take you and allow you to plug staffing holes whenever needed.

An outsourced team can also advise you on hiring decisions and tell you whether it would be better to hire people or work with contractors. They may also be able to warn you of changes and how you may need to modify your staffing strategy.

You’ve Had Issues with Dangerous or Malevolent Employees

If you constantly find yourself getting fooled into thinking that the people you’re hiring are safe and trustworthy, you need to work with an HR service. An outsourced team can help perform background checks on applicants and verify if the information on their resumes is correct. This could allow you to identify red flags that would let you know that an employee might not be a safe choice. 

If you’ve experienced any of the issues we’ve mentioned, you should consider outsourcing your HR department immediately. This could help you save a lot of time, money, and headaches.

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