Small business leaders often insist that their people are their greatest asset â and with good reason. A small business is often fueled by individual passion, and that passion attracts similarly motivated achievers. Knowing this, it's easy to make a sentimental case against outsourcing human resources (HR) functions in your small business. If your people are so important, why entrust them to strangers?
Yet, you may already be engaging in HR outsourcing without thinking of it in those terms. Over 1.2 million businesses rely on ADP or Paychex for outsourced payroll services. The reason these options are attractive is simple: Using a payroll vendor ensures fast, accurate service of a key employee need (getting paid!) for a modest fee.
HR outsourcing can help you save time and money, even if your workforce isn't growing by leaps and bounds. Employee benefit options are an increasingly complex area, and healthcare-related benefits in particular are changing on an annual basis. The labor pool is evolving, with more workers taking themselves out of the traditional, full-time candidate market and offering services on a freelance or gig basis.
Discover the greatest benefits (no pun intended) of HR outsourcing. Here are six top benefits that external HR expertise can provide your company.
1. Adapt to an increasingly alternative workforce
The workforce is changing, as is the way in which businesses engage with talent. Deloitte's 2018 Global Human Capital Trends survey found that about one-third of companies are planning to expand their use of contractor, freelancer and gig workers by 2020. Many companies, however, haven't thought through just how to make the most of their engagement with non-traditional workers. In the Deloitte survey, only about 16 percent of companies say they have the right tools and processes in place to manage such a complex workforce. And fewer than one-third of employers have methods for monitoring freelancer contracts or assessing the quality of non-traditional workers' output.
In conversations with an outsourced HR professional or team, ask for help to ensure your business is getting what it's paying for out of an increasingly distributed workforce.
2. HR experts can help with risk management
Good intentions alone can't keep you from compliance troubles, particularly in a heavily regulated field like financial services or healthcare. Not to mention, the omnipresent nature of social media and the increasing popularity of employer review sites means that even the slightest compliance misstep can easily come under public scrutiny. HR outsourcers can help you identify flawed practices and apprise you of crucial legal changes and precedents that impact your business.
3. Provide faster service to employees to increase employee retention
If your small business doesn't have a comprehensive HR outsourcer or a dedicated in-house HR professional, all of your human resources responsibilities are likely distributed among employees who have other primary responsibilities. When this happens, the response time for employee HR inquiries and requests can suffer, and with it, employee satisfaction often falters.
An outsourced provider will always be available to your workers â and far more reliable than an employee who is already stretched to the limit. Self-service, call center and even part-time, on-site HR consultants can help employees feel their needs are being met professionally. .
4. Stimulate growth with enhanced hiring practices
HR outsourcers can upgrade your hiring practices beyond the paperwork associated with onboarding. An outsourcer can provide tools that help you identify and attract passive candidates or add artificial intelligence to your candidate-selection process. An HR outsourcer can evaluate candidates across a much broader client base, which saves you from developing your own solutions or going through a lengthy selection process with dozens of point-solution vendors.
5. Supplement and advise your leadership team
Let HR outsourcers help you save time and money on the technical and administrative side of HR, and encourage them to offer advice and input when appropriate. But don't look at them as a substitute for leadership, accountability or conflict-management skills. Senior leadership still has to establish and maintain a company's culture and sense of fair play. Outsourcing the nuts and bolts can help your designated HR leaders find time to nurture those big-picture issues.
6. Evaluate your business relationship on an as-needed basis
Whether you go with a full-spectrum professional employer organization that takes over almost every non-core function of your business or spread single-function outsourcing among a handful of players, remember that these are vendor relationships that need to be managed. If you're not holding an HR outsourcer accountable for performance and outcomes â or regularly evaluating the cost of their services versus that of the competition â you're selling your business short.
Outsourced HR services can be a valuable asset for small businesses
In the single-service outsourcing market, software-as-a-service vendors are always looking for new opportunities to disrupt established giants and reach small businesses with unique value propositions. Among larger outsourcers, you may find more flexibility to negotiate for add-ons in exchange for loyalty or expanded business. For example, especially in a large urban area, it may be possible to negotiate for discounted or free hours of on-site HR consulting every month, since a single professional may be able to bounce from suite to suite in a larger building or commercial development.
Like any outsourcing decision, seeking help with your human resources processes boils down to how to spend your time and money to best advantage. Look for your pain points, ask your employees where they see gaps in your HR processes and evaluate your options with clear goals in mind.
Find outsourced HR resources for less from Business Deals
If you are a small business owner, outsourcing HR services can be a wise investment. By outsourcing HR tasks, you can save time and money, improve compliance, and attract and retain top talent. This can help you grow your business and achieve your goals. Sign up for Capital One Business Deals and start saving on outsourced HR services now.