Why Outsource HR?
While regularly facing challenges regarding daily time management, companies lack when applying expertise to grow their businesses. Financially, it doesn’t seem logical for many companies to build the internal expertise to support all business aspects, so they look for external partners in skilled areas-such as IT, Payroll, Marketing, and Human Recourses. Moreover, if a company has inadequate support then they may create compliance, legal and reputational risks.
Even when a company decides to internalize HR, they wind up with a “Department of One.” The one or two person HR Department finds it nearly impossible to have gain the expertise necessary to attract, grow and retain their workforce-or to stay ahead of the many challenges brought on by the changing workforce, ACA, and new regulations.
As a result, many employers turn to outside experts to provide the support they need around compliance, recruiting, training and development, salary surveys and compensation design, engagement and retention strategies and benefits. Outside experts have access to more resources than a company can individually afford, as well as knowledge of the latest trends and developments. Companies are looking for experts that can provide expert support in a flexible and cost effective manner.
The Pros and Cons of Outsourcing HR
When considering the option to fully or partially outsource HR, companies consider the following
• Ability to focus on running your business and streamline internal processes.
• External HR professionals have access to more resources where you only pay when you need them-thus eliminating supplementary research time.
• Outsourcing necessary HR services is less costly than having a fully staffed, in house department.
• External HR professionals can provide you with more expertise on issues such as labor laws, salary information, compensation and benefits information, and talent development and retention strategies.
• One internal team member no longer assumes responsibility to know it all. Your HR staff has a wide array of duties and as amazing as they are, it would be really difficult to be stellar at every single one of them.
Cons of Outsourcing HR
- Increasing risk of liability if the partner you select does not have the expertise or experience working with companies in your industry
- The firm you work with has a primary focus in another area and HR support is an ancillary activity
- The external expert has limited areas of expertise-meaning you are always responsible someone else to fill a new need such as compensation or training and development
With employees serving as your greatest recourse, choose an HR professional carefully by confirming that the individual or firm you hire excels in providing HR services. To avoid a problematic firm or the possibility of legal and compliance issues, check references and ask questions.
Is Outsourcing HR Cost Effective?
There are a large number of costs involved in maintaining an effective in- house HR and payroll function:
• Salaries of the HR staff
• HR regulatory tools and subscriptions
• External Legal Support of the HR staff
• Costs of creating training programs and hiring trainers
• Costs of recruiting tools
• Office space
• Time spent developing and improving internal processes
• Managing the in-house team and the people risk of “Departments of One”
When you hire an HR consultant, you often pay an hourly rate or a monthly fee. You can decide how little or how much support you need.
• A high level of service can be provided at a lower cost.
• You can hire the best experts at a fraction of the cost of a full time resource
• You benefit from the shared knowledge and experience of an expert that works with many companies like yours.
While comparing the notable pros to the heavy cons in your debate whether or not to outsource your HR, consider the pattern regarding the listed cons. Where the con list may raise additional doubts, the overall synopsis emphasizes it’s negativity when it’s gone the wrong way. By choosing the wrong HR service provider, or one lacking fundamental experience, you set you and your company up for potential litigation and/or failure. But consider what you and your business can achieve if you initially start with the right individual or firm for your business.
At MCDA CCG, INC. we have successfully provided HR services to a wide array of business in a wide array of industries. We’ve provided a download link to our flyer below, and as as you may notice from it, our attentive HR services continue to propel businesses towards success by providing consistent and affordable pricing models while focusing our demonstrated efforts to encourage your growth. Don’t waste time or resources with other inadequate companies; contact our team of quality experts to provide you with a no hassle consultation to get your HR concerns solved. Contact us today!