12 May 5 Key Reasons to Outsource Your HR
When business owners try to delegate HR activities to other employees (for example, by giving the finance manager payroll responsibilities or having department heads manage employee concerns within their respective departments), the outcomes can be uneven at best and chaotic at worst.
In this HR outsourcing guide, we’ll go over scenarios where HR outsourcing may be beneficial, the many types of HR outsourcing services that third-party HR companies such as Leapworld Limited provides, and the benefits and drawbacks of outsourcing HR.
What is HR Outsourcing
HR outsourcing is a contract in which a corporation employs a third-party company to manage some or all of the company’s HR responsibilities. Payroll processing, employee benefits administration, talent recruiting, or all of the above and more can be outsourced.
When should you consider outsourcing your HR services?
If your company is expanding and HR obligations are becoming too much for you to handle, outsourced HR may be the answer. Here are five signals that your company’s HR should be outsourced.
1. You’re spending a lot of valuable time dealing with HR issues.
There is no escaping the fact that, as a business owner, you must shoulder numerous tasks in addition to supplying the products or services for which you established your company. There is no escaping the fact that, as a business owner, you must shoulder numerous tasks in addition to supplying the products or services for which you established your company. However, HR issues can take a lot of time away from revenue-generating tasks.
2. You are concerned about or have been exposed to liability
An experienced HR professional must have a thorough awareness of hiring standards, requirements, collective bargaining agreements, recruiting, and training – as well as the ability to discover qualified individuals to fill your open positions. Some HR managers are also in charge of payroll. By outsourcing HR, you hand over control to someone who is well-versed in both the practical and legal sides of the job. A single tax filing error might be enough to pay for a year of outsourced HR.
3. You want to save money
Outsourcing saves money in a variety of ways. For one reason, outsourcing HR gives you access to the skills of someone you won’t have to teach or compensate. You take advantage of that HR person’s company and services, which may involve time-consuming responsibilities like payroll. You spend money when you hire a professional outside agency to handle your company’s HR needs, but you also gain time to focus on your core business tasks and lower your legal risk. The ultimate result is a more profitable bottom line.
4. In your company, the HR lines of accountability are unclear.
You may do all HR chores if your HR functions are distributed across managers and department heads, but you may also muddle the lines of accountability. Employees may be unclear where to report a problem, supervisors may be unsure if they are relaying accurate information, and HR responsibilities may be overlooked. When you outsource HR, your managers and department heads may focus on their departments without having to worry about HR issues, and you can rest assured that you won’t encounter legal issues as a result of haphazard HR obligations.
5. You want your employees to be happy and more productive.
Employees will be happier and more likely to stay with you if they have access to outstanding fringe benefits, know that your organization cares enough to ensure that HR issues don’t spread to other areas of the business, and can participate in professional training. Your company will prosper if your management team has a business partner such as Leapworld Limited to help establish your culture.
Commonly Outsourced HR functions include:
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- HR administrative duties (e.g., creating employee handbooks, implementing HR policies, terminating employees)
- Employee recruitment and onboarding
- Background checks investigations
- Administration of employee benefits
- Payroll administration and processing
- Legal compliance and HR risk
- Employee development and training