By: Sam Ashe-Edmunds
Many small businesses grow large enough at some point that the owner no longer can handle the company’s hiring, training, firing and overall employee management tasks. This requires hiring a human resources manager or using an outside consulting firm. Understanding the implications of outsourcing your human resources functions helps you make a more informed decision as to whether this choice is right for your company’s needs.
Scope of Work
Outsourcing your human resources function can give you more access to expertise, with a human resources firm or consultant able to offer more services and benefits than a typical in-house human resources generalist. A firm or consultant can offer such services as recruiting, applicant screening, employee training, benefits planning, payroll administration, creating total rewards and wellness programs and meeting your legal compliance obligations. Even if you have found an excellent employee candidate and are leaning toward hiring her, contact one or more human resources firms or consultants to learn the total services they offer. At the very least, you might use them to support or supplement the work of your employee.
When you hire an employee to handle your human resources function, you have an exact cost for that employee. Using a human resources consultant or firm makes it difficult to budget, unless you limit what the person or firm can charge. While an outsourced human resources function might cost more than an employee, outsourcing could lower your overall costs. For example, a firm may provide you with advice for lowering payroll taxes, help you recruit and train more productive employees or help you maintain higher staff retention rates.
Unless you have the budget to hire a trained human resources professional, you are likely to get higher quality from your human resources function using an outsourced firm or consultant. These experts stay abreast of the latest best practices in their profession and legal updates. They also know the tips and tricks of the trade for maximizing workforce productivity while controlling costs.
When you outsource your human resources function, you don’t have 24/7 access to your employee records as when you manage this work in-house. You must work around the firm’s schedule, which might include not being available during normal business hours because it is serving other clients. To minimize this problem, request immediate duplicate copies of all work products an outsourced human resources business creates for you so you have unfettered access to important documents you might need on short notice.