If you’ve noticed continual growth in your business over the past year, well done! It’s a competitive market out there no matter the industry you are in. With growth though comes new challenges. Not only are there more difficult financial targets to hit but the day-to-day running of the business can change considerably. Where in the past, there may have been a more casual approach to some of the more “boring” aspects of the business, these things now need a heightened focus. Take HR for example, it can be a complex minefield of policies and procedures that, in the past, you may not have paid a great deal of attention to. Now, with the business needing to increase recruitment, be understanding of the DE&I landscape and follow changing regulations, it can be tough to stay on top of everything.
That is why many businesses look to outsource HR. It gives ownership of HR to an external group whilst ensuring that you are fully compliant with all aspects of Human Resources.
In this blog, we look at why outsourced HR services for a growing business can be a key to success and compliance.
What are outsourced HR services?
Outsourced HR services are when you employ a qualified third party to take on the management of HR within your business. In many cases, it may not involve all aspects of HR but will likely be used to streamline HR processes so the business can function without spreading itself too thin. This means that a specialist HR company may take on all or some of the following HR functions that were previously looked after by your team:
- Payroll
- Employee training
- Recruitment and onboarding
- General HR admin
- Risk assessments and compliance guidance
With expert professionals able to take on a host of tasks, it allows you to put your focus, and that of your team, into what you do best.
Why are businesses choosing to outsource HR?
The reasons for outsourcing HR can be wide-ranging and much depends on the size of the business. A small business, for example, may not be set up to facilitate HR within its infrastructure. It may be that as an independent business, HR is far from the minds of the business owner and something they just aren’t well versed in.
For larger companies, the complexities of regulations, pensions, pay and more can be a lot to deal with, and could see, as we said earlier, businesses stretched beyond their capabilities. They would then have to recruit additional team members and that could prove a significant increase in costs that there may just not be the budget for.
The key benefits of outsourcing HR for a growing business
We can already assume that your business is growing at a steady rate and that now you must take the step of either creating an HR department or sourcing an external HR team that can manage the processes for you.
We’ve selected a broad collection of benefits that outsourced HR could bring to your business.
1. Access to trained HR professionals
Where you may have waltzed your way through some HR basics in the past, as the company grows the depth of your HR knowledge needs as well. Appointing an outsourced team of specialists gives your team a bank of experts to rely on for help, guidance and the management of all HR procedures and issues.
This could dispute resolution, payroll issues, benefit schemes, contracts, recruitment, diversity & inclusion and a host more.
With their wealth of knowledge, you can remain confident that your business continues to operate compliantly and that your team has a support network behind it.
2. Cost reducing
If your business is expanding, it could be time to set up an HR department to handle the recruitment, the departures, the payroll, the conflicts, the compliance with regulations and more. However, this could be quite a jump for the company and quite an expensive one. You may need to recruit several experts to ensure all aspects are covered but should one leave or be off long-term sick, does that leave you with a gaping hole to fill that then incurs further cost? You may also need to purchase specific HR tools and applications to remain compliant. Why not save that expense and keep that cash for the work party or pay raises?
Opting for an external HR provider means you won’t need to build a department from scratch, source new tech, or fill any vacant positions as everything will be managed by a fully trained, expert team.
3. Increased workplace efficiency
If you choose to go it alone, you might find yourself bogged down self-training yourself in new laws, payroll procedures or new systems. This not only takes you away from your role within the business but stands to have a reverberating effect down the command chain. When people can’t reach you, they turn to someone else, who will now be abandoning their key role in helping the person requesting assistance. This could go on and on.
Outsourcing your HR will allow you to remain focused on the continual growth of the business and other people focused on their specific roles. With HR agencies fully trained and always updating their teams on new policies, laws and regulations, you won’t need to spend time checking and rechecking you are on the right side of workplace law.
4. Enhanced recruitment
Should vacancies arise within your growing business, it can often be a struggle to find the best candidates. Specialist HR companies will have a dedicated hiring strategy that is built to align with what gap you need to fill within your business. Furthermore, the people already working for your company will now also have a more refined path of progression. With reviews and training assisted by the HR company, you can help your best people make the correct moves along the career path whilst having the positions they leave behind filled by suitable candidates.
5. Compliance and risk
With GDPR breaches potentially costing millions, discrimination leading to court hearings and lack of relevant health & safety procedures occasionally leading to jail time, it is so important to remain compliant with legislation. A team of outsourced HR experts will ensure the ship sails in the right direction and that both you and your employees are fully up to date with what you all need to know. They can help instigate training, provide relevant documentation and ensure that all legal obligations are met.
6. Improved employee engagement
It may be taken as a given that you provide a welcoming and safe working environment but there may be rumblings behind the scenes where people don’t feel as happy as you had hoped.
This is particularly noticeable in smaller companies where HR may not get as much a focus and relationships between staff and management may be a little forced. An external HR company will be able to address a lack of employee engagement and help foster a greater mutual understanding between all. Access to better benefits, enhanced training and HR expertise can all help workplace culture improve. This can then see productivity and workplace relationships developing positively.
These are just six of the core benefits of outsourcing your HR as your company continues to grow. Substantial growth may not even be forthcoming but if you can budget for outsourced HR now, the growth you wanted may come around sooner than expected.
