Is Outsourcing HR Right For Your Business?

Whether you currently have a full-time Human Resources professional on board, or an office manager who is handling basic HR responsibilities, an external Human Resources consultant, such as Instant HR Solutions, can complement your existing structure or lack thereof. 

Some reasons you should consider outsourcing some or all of your human resources responsibilities are:

• Many small companies hand off responsibilities for the human resources function to an untrained staff member - an administrative assistant, the office manager, the bookkeeper, to name a few.  While this may save you money, it can leave you unprepared if a major problem comes up like a sexual harassment complaint or a wrongful termination lawsuit.  And it can possibly cost you more in the long run because the hourly fees that you pay your attorney are typically much higher than what you would pay a human resources consultant, and you'll need to call in that attorney as soon as you find yourself in legal hot water.  A human resources consultant can provide the expert guidance necessary to avoid these land mines altogether.
• In addition to helping you avoid expensive employee lawsuits, outsourcing HR to an external consultant reduces the administrative burden that is currently placed on whomever is responsible for the HR function within your company.  Even if you have HR professionals on staff, outsourcing some aspects of HR, especially the more tedious, repetitive tasks, can free up your HR staff to be more strategic and develop new ideas and programs that will benefit your employees and your company. 
• Working with an external consultant, rather than hiring someone on a full-time basis, can cost considerably less.  Think about this.  If you've reached a point in your business growth where you're considering hiring a full-time Human Resources professional, hiring a junior person without much experience in the field isn't going to be much help if that's your single source of HR expertise.  That person is still going to need to call on the employment attorney for answers to basic legal questions, so you'll still have those legal expenses.  And can you really afford and do you really need a senior-level HR director who could cost $100k or more per year PLUS benefits?   Hiring an external consultant on a time and cost basis you can control may be the answer.

An external Human Resources consultant offers many services including:

• Regulatory compliance.  The primary role of a Human Resources consultant is to ensure you are in compliance with all federal, state and local employment laws in the states in which you operate.  This includes auditing your current practices to determine what you're doing right, what you're doing wrong, and what you're not doing at all, and implementing the necessary changes to get you in compliance.
• Risk management.  An experienced Human Resources professional can help you manage employee situations in a manner that will help you avoid expensive employee lawsuits.  Whether it's a performance problem, a harassment complaint, an employee with an alcohol or drug problem, or an employee who needs to be terminated for whatever reason, a qualified Human Resources consultant can help you navigate the legal and organizational issues involved to deal with the problem and protect your organization.
• Cost savings.  An HR consultant can review your benefits programs and help with plan design and benefit selection to either reduce your current costs or get more for what you're currently paying.  The same goes for other employee-related areas, such as recruiting costs (advertising, recruiter fees, etc.), and payroll, benefits and retirement plan administration fees.
• HR management.  An HR consultant can help you put your HR structure in place, train your employees and managers, train a current staff member on process and policies, and then be available on call as you need them to deal with any tough challenges that arise.  This includes developing an Employee Handbook with policies and procedures for your business; developing processes for recruiting, hiring and new hire orientation; developing programs to use for performance review; establishing a compensation framework; implementing disciplinary processes to deal with performance problems; and providing guidelines for handling terminations.
• Special projects.  You don't have to completely outsource your HR function and can hire an HR consultant to help with specific one-off projects such as developing an Employee Handbook, creating a performance review program, writing job descriptions, providing training, developing a compensation program, and more.

Businesses of all sizes are outsourcing HR these days.  Smaller companies outsource HR to get access to HR expertise that is not available internally, and to relieve them of HR responsibilities, enabling them to focus on what they do best.  Large organizations outsource primarily to remove the administrative burden from their current HR staff and free them up to work on more strategic initiatives.  Should you decide that outsourcing HR is right for your business, give us a call at Instant HR Solutions.  We'd love to hear from you and to help you figure out what's the best approach for your business, because one size doesn't always fit all.