When it comes to outsourcing HR services, most business owners are highly skeptical. On the other hand, some businesses outsource their HR functions to HR outsourcing companies without giving it a second thought. While it is true that outsourcing HR takes away the unnecessary burden of performing a repetitive task over and over again, there are still some things to consider before you go ahead with HR outsourcing. There are plenty of HR functions, and you might not have to outsource each and every one. You should also know more about the various HR responsibilities before you go ahead with outsourcing HR functions. Either way, we will tell you about the key things you should consider before you outsource your HR functions.
Consider the Size of Company Before Availing Services
When you are hiring services of a dedicated HR firm, chances are you have made this decision because you are finding it challenging to manage the HR matters in house. However, before you proceed with the HR outsourcing process, you should consider your organization’s size. Typically HR outsourcing is an ideal option for companies that are new, expanding, or those that are medium size companies. This is because newly created firms have a lot to handle, from getting investors to troubleshooting their products or services and expanding their business. Not to mention the funds available to new companies are not enough for them to set up an in house HR firm. So if you are a newly formed firm, you should consider outsourcing HR.
Similarly, companies that range between small to medium in size are concerned about compliance regarding their workforce, which is why services of a professional HR firm such as HR Options are an ideal choice for midsized companies. Finally, if you are expanding your workforce, it can be an inexpensive way to stay compliant with tax and labor codes across state or national borders.
When it comes to larger companies with over 500 employees, HR outsourcing can be limited to a few essential HR functions. For example, larger firms might want to outsource smaller HR functions such as payroll and employee training and focus on more critical HR functions such as finding the right talent or vice versa; it all depends on their business goals.
What HR Functions Should You Outsource and Which Ones Should Be Kept in House?
As we mentioned above, you might want to outsource some HR functions while keeping the other HR functions in-house. HR consultancy and outsourcing firms offer a range of workforce solutions and it is up to you to decide which solutions you want to avail of and which ones to handle on your own. Keep in mind that if you are going to outsource some HR functions while keeping others in-house, you will have to work in coordination with the HR firm.
On the other hand, if you outsource all the HR functions, you don’t have to put any effort into HR matters. So, before you make your HR outsourcing decision decide whether you want to do a full or partial HR outsourcing. In the case of partial HR outsourcing, most organizations outsource functions such as payroll, employee and recruit background checks, and healthcare benefits. At the same time, companies prefer keeping strategic HR functions such as employee training and development in house.
Cost of Outsourcing Firm
Before you start looking up “HR consulting firms near me” online, stop and think how much you are willing to spend on outsourced HR solutions. Usually, external HR solutions are cheaper than in-house ones, but just like any other business investment considering the cost of outsourcing HR functions is essential. If you try to hire a cheap HR outsourcing service, you may do more harm than good in the form of unsatisfied employees and errors in calculating payroll or employee benefits. So before you outsource HR, ask for a quote from a reputed and reliable HR firm.