Highlights
- The benefits of HR outsourcing are numerous, from streamlining HR processes and daily admin tasks to gaining access to seasoned experts.
- By delegating some of their HR responsibilities to a trusted partner, companies can ensure compliance and have more time to focus on higher-impact activities.
- At EmPower HR, we provide HR solutions to help businesses focus on what they do best: growing their business. Learn more about our HR solutions.
From small businesses to large corporations, outsourcing HR is becoming increasingly popular.
Imagine you are an online retailer needing a new mobile app for customers. While you might have a website maintenance team on board, you wouldn’t likely ask them to develop it. Instead, you can consider outsourcing the work. After all, app development involves highly specialized skills, and the stakes are relatively high.
Similarly, even if you employ a full-time HR representative, an HR expert must possess an extensive understanding of complex regulations, processes, and best practices, which could have costly consequences if unmastered.
Let’s explore the main reasons why an organization should outsource its HR functions.
What Exactly Is HR Outsourcing?
HR outsourcing involves delegating some of your company’s HR functions to an external service provider. Instead of overburdening your internal team with time-consuming HR tasks like processing payroll, managing benefits, and regulatory compliance, you can trust a specialized HR partner with those responsibilities. This allows you to focus on higher-impact tasks that directly contribute to your business’s success.
7 Benefits of Outsourcing HR Functions
Significantly Reducing Your HR Costs
Outsourcing HR functions can lead to substantial cost savings for your business. Studies have shown companies can often save over 20% of administrative expenses compared to keeping all of their HR functions in-house.
This cost reduction allows you to reallocate your budget towards core business activities and customer-facing initiatives, ultimately driving greater profitability and growth.
Gaining Access to HR Experts
Finding the right partner gives you the confidence of knowing a seasoned expert is handling your HR functions.
Companies can tap into specialized expertise in areas like recruitment, compensation and benefits, employee relations, and training and development, to obtain strategic guidance and improve daily HR processes.
Offering Better Benefits to Your Employees
Outsourcing all or some of the HR functions broadens a company’s horizons and often makes it possible to provide services and benefits that can’t be offered by a small business. HR experts typically benefit from economies of scale since they work with multiple clients. This advantage can open access to perks that the service provider can pass along.
Happier Employees
You might wonder, “If I already have an in-house HR professional, why consider outsourcing?”
The reality is that HR is complex and constantly evolving. Even companies with dedicated HR teams often find that outsourcing specific functions can significantly benefit their employees and the overall business.
By partnering with an external HR provider, you can effectively mitigate risks and create a more positive and productive work environment. A recent Oxford University study found that happier employees are 13% more productive, allowing the business to achieve objectives sooner and having a positive impact on their bottom line.
Minimizing and Effectively Managing Risk
One central area where organizations can mitigate risk through outsourcing is employment and labor law.
Employment and labor laws change frequently and staying up to date on laws and regulations that significantly impact the workplace can be a daunting task. Outsourced HR professionals are always aware of various federal and state employment laws, helping businesses stay compliant and avoid costly lawsuits. Also, they maintain and audit company policies and practices for the organization and its employees.
Streamlining Vital Functions
Efficient and productive employees are the drivers of a workplace. Outsourcing has the advantage of creating greater efficiency and simplifying HR systems such as payroll administration and compliance management. This helps employers and managers spend less time performing mundane tasks like paperwork (boring!) and dedicating time to more strategic and impactful activities, such as promoting career advancement opportunities.
Efficient Performance Management
Employee performance is more crucial than ever to maintain a competitive edge in your marketplace. Outsourcing this HR function can ensure you facilitate, utilize, and measure performance with the top tools and metrics.
HR experts can implement performance management plans to ensure employees act per company policies and procedures, resulting in successfully meeting business goals.
Set Your Business Up for Growth with EmPower HR
As the world of business keeps changing, organizations are realizing the benefits of outsourcing HR functions to a strategic partner.
Outsourcing HR not only allows leaders to focus on core business goals instead of getting bogged down in administrative tasks, but also ensures that the critical aspects of your business remain in the best and most capable hands possible.
At EmPower HR, we help businesses take their HR responsibilities off their plate, by offering a set of customized HR solutions to streamline admin processes and leverage deep expertise in areas like recruitment, compliance, and employee relations.
Ready to unlock your business’s full potential? Contact us today for a free consultation.