Does My Business Need a Human Resources Department – Or Should I Outsource?

Growing pains are a part of every business, especially when a company reaches a specific threshold in the number of employees needed to get the job done. Ask any small to medium sized business owner and they will tell you that dealing with the people aspect of their business is oftentimes more troublesome than attracting customers or developing new market ideas. From recruitment and onboarding to employee training, payroll and workforce law management, human resources demands a lot of different “hats” in an average day. Avoiding these important milestones can stop business growth in its tracks.

Signs that you need to hire an HR outsourcing solution

It’s not surprising that company leaders often get to the point of being overwhelmed, as the above infographic demonstrates. There are some very good reasons why you may need to consider outsourcing your human resource functions while you decide if hiring an entire HR team is a valid one for your business.

• You are in a hiring wave, or anticipate that you will need to recruit new staff for a large project.
• Your company is expanding and in the process of opening up a second or additional branches.
• Your employee compensation and benefit packages are out of control or outdated.
• Your begin to notice employee relation issues that require immediate support.
• You are not sure if your company is legally compliant with local employment laws.
• You do not have a staff member on board knowledgeable about the above aspects.

If you are trying to determine if hiring an HR professional to work in-house or outsourcing to an HR business process outsourcing firm makes the best sense, it’s time to review your current status.

Making the business case for outsourcing HR vs. hiring onsite HR

As stated above, there are a good number of reasons why a company would choose to outsource HR functions rather than hire a full time HR team. A Gartner Group survey indicates that as companies expand, they tend to lean on HR as an outsourced model, in order to create sustainable growth. A vast majority of these services include payroll, benefits administration, and recruitment, which can all be time consuming and tedious.

The future of HR outsourcing

In a ground-breaking study conducted by i4cp, a corporate research network, The Future of HR: The Transition to Performance Advisor, revealed what the HR model of the future will look like, and how companies need to get on the HR outsource bandwagon now. High performance organizations around the world report that they expect to boost their use of outsourcing and shared services in the coming years. The top growth companies projected that they will be tripling their outsourcing efforts from 16 percent to over 36 percent. Another 49 percent of these polled companies advised that they are using shared services, including HR functions, and expect this to grow to 66 percent.

The time is now to start reviewing the opportunities available to you as you shift some of your HR functions to an outsourced model.