6 Reasons to Outsource Human Resources

Outsourcing — it’s not just for big business. With more and more of our communication done online, and flextime and telecommuting increasingly popular options for today’s workforce, it follows that outsourcing is becoming more usual as well. It’s smart for small- and mid-sized company managers to take a hard look at what aspects of their business can be outsourced, and human resources is a strategic place to start.

Here are six compelling reasons your company should consider outsourcing to reputable HR consulting firms:

  1. It saves you time. If you’re like most small- or mid-sized company managers, you have many tasks to juggle at once. You’re the go-to resource for your staff, you’re in charge of customer satisfaction and you are on the line for making sure your marketing and sales are top-notch. And then, you have the duties related to human resources, such as payroll, benefits, training and recruitment. Outsourcing these HR tasks to a consultant leaves you and your staff time to focus on things that really matter to your business — like giving quality service to your customers.
  2. It may reduce your risk. The regulations surrounding payroll, benefits and other human resources issues are notoriously complex on the federal level — and vary from state to state as well. Add The Health Care Reform Law, and you’ve got quite a lot of legal language to sift through before you understand clearly what your business needs to do to comply with the regulations. It’s easy for an employee who wears many hats within your company — a shift manager pulling double duty in payroll, for example — to make a mistake that ends up costing your company in lost productivity or even legal fees. When you hand over the reins to a consultant, you’re also handing over some liability.
  3. It saves you money. This is the same reason large corporations send jobs overseas — but outsourcing HR tasks is not the same as shifting your manufacturing abroad. Outsourcing your HR needs won’t necessarily take jobs out of America, as there are many U.S.-based consultants to choose from. It saves you money in several ways: in payroll if you previously had someone doing your HR tasks full-time, and in training if you were trying to get other staff to fill in on HR duties. HR consultants may work more efficiently than your staff who are not HR specialists, so even if the hourly rate you pay the consultant seems high, it will pay off in the long run. You’ll also save money on overhead costs by not having to supply the computer, software and office supplies an HR department — even a small one — needs.
  4. It brings a new perspective to your HR tasks. One of the best reasons to hire an HR consultant is that with him or her comes a range and depth of experience beneficial to your firm. A reputable contractor has training in the latest procedures, keeps abreast of trends and news, and has the most up-to-date software needed to complete your HR filing.
  5. Your employees will be happier. Because having a third party managing your HR can streamline your staff’s access to the information they need and clarify your training procedures, outsourcing can boost company morale. Staff will also appreciate your increased assistance with the day-to-day concerns of running the business, since you will no longer have to spend so much of your time on HR tasks.
  6. Your new employees will be higher quality. Hiring professional headhunters will help your business attract more experienced recruits. HR consultants know the right job boards and networks to search for employees who will be a good fit for your team. They will also have a variety of hiring tools at their disposal that an in-staff HR department may not be able to provide. When you outsource your recruiting, you’re also freeing up time so you can bridge the gap in staffing until the new recruit is ready to start work.

About the Author: Earl Green is a freelance business writer and former recruiter in New York City.