Outsourcing HR: When is it right for you?

When your business is going well, it’s easy to get swamped with day-to-day tasks. Focusing on your clients and your work is the right thing to do, but a thriving business brings greater back-office requirements that – if left unattended – could easily derail all your hard work.

In the past, dealing with organisational growth was often the role of an in-house HR department. However, outsourcing some of your HR could be an option.

As a growing business, should you consider going outside your own office for HR support?

Is outsourcing right for you?

There’s no simple answer, and you’ll need to carefully consider your needs. But size is a factor. In businesses of fewer than 50 employees, there’s rarely a dedicated HR team, perhaps just a manager who dabbles in HR alongside their other duties. Over 50 people, it becomes easier to have in-house HR. So if you’re running at 20 to 50 employees, the time may be right to think about an outsourcing solution.

Your time is precious

One thing the experts agree on: if you’re spending too much of your time on admin and not enough on strategy and building your business, it’s time to consider another approach. Small-business owners often feel overwhelmed by necessary but time-sucking tasks like payroll, HR management and recruitment. While it may be tempting to DIY, you’re not serving the needs of your business by taking yourself away from growing your client base and focusing on your future strategy.

Better results at a lower cost?

There’s nothing wrong with buying in skill. Legal and policy compliance, for example, is complicated and constantly changing. When you outsource, you get experts who have the knowledge to navigate these minefields.

Recruiting talent is an art as much as a science, and hugely time-consuming. By hiring professionals dedicated purely to recruitment, you have a better opportunity to get great results.

Plus, an innovative HR supplier will bring the latest technology and thinking to the table, including analytics, social media and leadership psychology, and they’ll know how to use them to meet your specific needs.

Now the downsides…

While there are definite advantages, there are also drawbacks to consider. HR is about people, and good in-house HR understands your employees and forms relationships with them. They know where the faultlines of the business run; they’ll know if an issue is bubbling up, before it bubbles. They can help keep your employees happy – and help you keep your employees.

While there are plenty of HR-related functions that don’t require the human touch, someone with emotional intelligence, good people skills and a knack for knowing how to keep things humming along happily is hard to re-create remotely.

A tailored approach

It might be useful to think about picking and choosing which HR tasks you outsource, and which are better kept in-house. An Australian study published in the International Journal of Human Resource Management listed the top five outsourced HR functions as recruitment and selection, training, occupational health and safety, payroll and employee benefits.

Handing the specialised, complex tasks over to experts and freeing yourself from admin-heavy duties like payroll might just give you more time to focus on the things that really matter to your business.

For more information about structuring your business for success, please contact us.