How Outsourcing Human Resources (HR) Can Help Your Business

Human Resources deals with a company’s most important asset – the employees. There is a multitude of different tasks an HR department must complete, such as recruiting, creating policy manuals, benefits administration, drug screening and more. Some things, like talent development, are better handled in-house. Other functions, such as payroll, can take time away from tasks that need personal attention.

The Rise of Outsourcing

Over the last ten years, outsourcing has become much more common. It is a great way for businesses to save money because it allows them to trim the HR budget while delegating task to firms that specialize in Human Resource functions. However, it is often difficult to determine what should be outsourced and what should stay in-house. Here are six tips to determine the best ways to utilize outsourcing.

One: Define HR’s Function

What is the overall mission of the HR department? If the priorities are things like recruiting or training, it might be wise to consider outsourcing more of the clerical duties like payroll and policy writing. Learn which duties can only be accomplished by someone inside your company.

Two: Determine What Can Be Outsourced

The HR duties not on the above list are all candidates for outsourcing. Things like temporary staffing, drug screening, background checks, and relocation are important to every company but none of these things are the driving force behind the company. Sometimes, items like regulatory compliance are actually handled better by an outside agency with more knowledge and experience in current rules and regulations.

Three: Team Building

Business demands more efficient methods, which often means less staffing. It is very rare to find a few people who are specialists in all fields of Human Resources. Outsourcing allows you to build a solid HR team. You will be able to find experts in each aspect of Human Resources to assist your on-site staff.

Four: Find Firms You Trust

Many companies worry that outsourcing leads to sub-par quality, but if you review a variety of firms, you should have the opposite experience. Check up on the firm’s background, make sure they have Better Business Bureau accreditation, and contact companies that have used their services. If it is unclear why a particular firm adds value to your company, don’t sign any offers – remember that outsourcing HR tasks is supposed to streamline your own company.

Five: Group Purchasing Organizations

Group purchasing organizations (GPOs) offer pre-negotiated contracts with places like staffing firms or managed service providers. The GPO does all the research, and it is their time and effort used to negotiate and manage several contracts. Most GPOs deal with health care but there is a growing market of GPOs focused on HR outsourcing.

Six: Complete HR Outsourcing

Some companies may find it advantageous to use a professional employer organization. These organizations assume all of a company’s HR duties. By hiring your company’s employees and being the employer of record, your employees could see major improvements like access to 401k plans, health insurance, life insurance and other benefits. This is called co-employment or joint employment and it is a common practice among smaller businesses.

Outsourcing HR duties is a smart move for any business. It will enable you to streamline your business, save you money and give you access to outside experts.

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