In Or Out? The Benefits And Value Of Outsourcing Your Human Resources Program

Employees are a company’s most valuable asset. For this reason, Human Resource departments play a critical role in various organizations. However, the complexity of addressing workplace issues has led some companies to outsource some or all of the HR function.

While there is no one-size-fits-all solution when it comes to human resources, there are some clear benefits to outsourcing some or all HR functions. In this post, we’ll examine some of the key functions of HR and how outsourcing these aspects of the role can benefit your company.

Cost Savings
Perhaps one of the most obvious benefits of an outsourced HR program is the associated cost savings. By contracting HR externally, companies can avoid another full-time salary, and pay only for the time individual services are render. While saving money by eliminating staff salary and further benefits is of value, an experienced outsourced HR resource can often bring additional cost savings (i.e. new benefit strategies, the ability to identify compliance issues before they become an issue, …) to the table, of which less experienced and, many times, distracted manager trying to fill an HR role will not be aware. As a non-revenue generating function, any reductions to HR costs benefit your company’s bottom line.

Payroll Processing and Management of Sensitive Personnel Information
Payroll is very cost-effective to outsource in comparison to in-house staff. This function can be a drain on not only HR staff’s time but on other key team members as well, including leadership. Outsourcing can also further protect sensitive employee information. A degree of separation between staff and those with access to their salary and bonus information can be very beneficial.

Development
Employee development is another key benefit of outsourcing HR. HR outsourcing firms will bring best practice performance management practices to bear in an organization. Frequently, small to mid-sized employers do not have effective performance management systems. Additionally, the outsourced professional can bring an element of objectivity to the process that may be difficult to obtain otherwise.

Compliance and Risk Management
Many employees outside of HR do not want to take the time, nor have the interest, to thoroughly understand complex employment laws and regulations. The potential risks and penalties of non-compliance with regulations have never been higher. A single misstep can damage the reputation of the employer and potentially subject them to significant financial liability.

Seasoned HR professionals can help you interpret employment laws and wade through the various regulations impacting your business. These might include rules related to insurance claims, hiring, terminations, and benefits.

In fact, outsourced HR professionals can, very economically, conduct overall compliance assessments, leading to increased peace of mind for business leadership.

Increased Efficiency and Focus
What business leader can’t benefit from increased efficiency? Outsourcing HR lowers the time staff and management spend filling out paperwork and managing employment processes. Among the largest benefits to small and mid-sized businesses is the ability it gives key management to focus on what makes them money, such as selling more, developing new products and improving operating efficiency.

Conclusion
Strong human resource support is among the most critical needs for businesses and organizations during times of growth and change. Unfortunately, HR is often not a priority for small and mid-size companies until problems arise that need to be addressed. But by then, it is usually too late.

In today’s complex business environment, there are very few companies that can afford not to have access to an HR resource of some kind. The question then becomes not “should,” but “how?” How will you provide HR services to your team, and what program is the best fit for your company?

If you are considering an outsourced HR program, or you’re just not sure what you want or need regarding HR support, reach out to an experienced business partners, such as Lauber Business Partners today and set up an assessment for your current program.

The HR Experience You Need, Whenever You Need It
At Lauber Business Partners, we focus on helping you succeed by ensuring you have both the best offense and defense in the management of your human capital.
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Our accomplished HR Business Partners have years of experience in a variety of businesses and organizations – from small, privately-held firms, to Fortune 500 companies and non-profit organizations – and have a full complement of capabilities to ensure your team has the optimal continuum of support and services to thrive. We look forward to supporting you and your team to ensure your continued success.