Knowing when it's time to outsource your HR
HR is a necessary part of the daily running of a business. From payroll and managing staff leave to handling employee data and keeping up with the latest legislation, HR duties are time-consuming tasks. In small and medium-sized businesses that don’t have a dedicated HR team, managers can end up embroiled in these tasks.
To ensure that HR functions successfully, businesses need to put strategies in place in order to delegate HR work effectively and make sure that those undertaking the work have the necessary qualifications. There are a couple of different options available for small and medium-sized businesses that do not have an in-house HR team.
For businesses with less than 50 employees, it is not uncommon to spread HR duties amongst team members. However, generally speaking, this strategy rarely works well. Small businesses who operate in this way often see falling productivity levels amongst employees who are trying to handle multiple tasks. Assigning HR tasks to employees on top of their usual job role can mean that performance will suffer across the board, and this is often the first sign that changes in HR delegation are needed.
As businesses start to grow, current employees will have less time to spare for HR tasks. However, in many cases it still isn’t economically viable for companies to hire an HR team. In this situation, businesses may choose to have one-off consultations with HR professionals, especially regarding legal policies, and utilise HR software to simplify HR tasks. HR software encompasses a wide range of tasks, including monitoring absences, planning staff leave, recording salary history, keeping health and safety records, and so on.
At this stage, other companies may see HR processes slowing down company’s productivity and decide to outsource HR tasks straight away. The most common reasons for a company to make this decision are because they need access to skills and knowledge that they do not have in-house, to improve the quality of HR work, and to save on costs by avoiding the need to recruit an HR professional to work full-time.
Outsourcing HR tasks allows companies to employ a freelance HR professional or consultant as and when they need them, avoiding the costs of a full-time employee. They are also able to choose to only outsource particular HR activities that cannot be adequately handled in-house, and these are most commonly related to legal services, payroll and pensions where specialist HR knowledge is required.
Many businesses will further decide to outsource recruitment activities, and training and development activities to a third party. These are highly time-consuming HR tasks that lend themselves well to being organised by a separate an outsourced specialist who can collaborate with relevant members of the team to achieve good results.
Knowing when is the right time to outsource human resources can be critical to both employee relations and business success. As soon as employers see employees becoming overburdened or productivity dropping, it’s time to reevaluate HR activities and consider outsourcing at least some of this work.
About the Author
Stuart Hearn has 20 years’ experience in the HR sector. He co-founded plusHR, a leading UK HR consultancy, and previously worked as International HR Director for Sony Music Publishing. Stuart is currently CEO of OneTouchTeam, an online staff leave planner, and Clear Review, a performance management software for small businesses.