The objective of any business is to innovate, move fast, and maintain a competitive edge, all while staying under budget. Every small business eventually encounters a critical need along the way – outsourcing its HR. When a company starts growing, leaders increasingly find themselves with limited time and resources. Managing some or any aspects of HR becomes difficult as a result.
Unfortunately, organisations just starting out tend to neglect the ‘people’ aspect in their business. Human resource responsibilities usually fall on a business leader who perhaps had some recruitment experience in the past.
People management encompasses more than hiring, however. When managed well, HR strategy can save costs and enable long-term growth.
HR outsourcing ensures people management is in good hands. It also ensures your company adheres to legalities, removing one less stressor for business owners who already have a ton on their plates. Contrary to popular opinion, outsourcing HR is not just for large companies. The benefits for small businesses are doubly significant.
What is HR outsourcing?
HR outsourcing refers to hiring a third party to manage a company’s human resources. The practice helps companies that may not have adequate time, knowledge, or internal resources. For these reasons, outsourcing comes with numerous advantages, specifically for small businesses. In addition to managing all aspects of hiring and payroll, HR counsel is critical from a compliance perspective.
Admin and legalities
Organisations must know what the legal obligations are when hiring people. A company should critically consider these aspects early on, even before recruitment begins. In addition, the person responsible for hiring must know about administering payroll, taxes, and pensions, among others. The process requires professionals that understand the complexities involved. When you outsource HR processes, you ensure business compliance with employment laws.
Recruitment
Finding talented people takes skills, resources, and a lot of time. While there may be hundreds of applicants, very few have the right skills and experience you need.
Why sift through hundreds of resumés online when an HR professional can do it for you? HR outsourcing finds the most suitable people for a role. Small businesses benefit from meeting vetted candidates with the appropriate knowledge and attitudes. Remember that the more skills and expertise needed for a position, the more complex the hiring process. HR outsourcing proves especially advantageous when hiring for executive or senior functions.
Training and development
Screening and recruiting candidates are only one part of it. Businesses must invest in employee learning and development to enable career progression. The ones that prioritise quality training demonstrate that they value employees. In turn, employees feel equipped and capable of carrying out their responsibilities.
External training may be the preferred method for most businesses. However, it is not the most cost-effective option. In addition, external training cannot always meet the needs of a specific business. Having a staffing agency on board could be a better, more targeted approach to a company’s learning and development.
More cost-effective than in-house HR
The appeal of HR outsourcing is its flexibility. Clients can settle on fixed fees, daily rates, or monthly retainers. Capable HR professionals don’t come cheap. But they still give you a higher ROI considering the costs of hiring a permanent employee.
Staff retention
Among all aspects of HR, retaining employees is, by far, the most challenging. HR outsourcing can design rewards, recognitions, and career progression programs so that employees remain motivated to stay.
Growth, profits, and survival are imperative objectives for any small business. It is unrealistic to think leaders can juggle core roles while also handling the nuances of HR functions by themselves.
Having experts to advise and formulate HR decisions is always an excellent approach. The clearer businesses are on their goals and objectives, the easier it will be to find a competent agency for HR outsourcing.
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