Why Businesses Are Outsourcing HR

Posted by | Wednesday, February 15, 2017
Why Businesses Are Outsourcing HR

The days of a tiny HR department with one or two employees are behind us. As workplace culture becomes more important, and businesses adapt to create the best work-life balance to get the most from their employees, HR is perhaps more important than ever.

That said, traditional HR departments are disappearing from businesses across the country. Never fear, this is not the end of HR. Instead, businesses are now choosing to outsource their HR needs. According to Forbes, nearly 50 percent of large businesses are outsourcing some aspect of their HR departments, and for some very compelling reasons: 

1. It saves money 

According to the Society for Human Resources Management, 26 percent of companies outsource to save money. This is the biggest determiner of whether a company will outsource: in other words, money is the biggest reason more and more companies are turning to outside experts to coordinate their HR needs. Employing the best of the best in HR comes with a hefty price tag, especially if you want them in-house. Outsourcing allows you to get the work of experts and their teams without paying the small fortune required to run an internal HR department. 

2. It's a good legal move 

The amount of federal case action lawsuits has been on the increase. In 2016 alone it increased 32 percent from 2015. Especially for non-profits, many of these claims are related to employer-employee relations. Outsourced HR departments often supply a "compliance specialist" who can help ensure that you avoid situations (wrongful termination, sexual harassment etc.) that might lead to lawsuits. 

3. It can streamline recruitment 

Finding the right candidate for a position can take months of interviewing, resume reading, and head hunting. Add this to the list of other concerns that come with operating a business, and you'll find that hiring often falls to the bottom of the pile. 

Outsourcing HR allows you to have the hiring and headhunting process going 24/7. Be sure that you coordinate with your outsourced HR department to make sure that you're clear about your company's mission, hiring practices etc, and this can be a huge timesaver. 

4. It allows businesses to focus on strategy, and leave the logistics to the professionals 

Many small businesses are limited by funding, number of personnel and hectic schedules. All available time should be spent on refining a strategy to move the company as a whole into the future. An in-house HR department often requires constant supervision, whereas an outsourced HR service has everything they need right at their fingertips. 

Deciding to outsource your HR department can be a big move for a  business, so it often requires careful thought. This is a relatively new concept, but more and more businesses are opting to outsource. HR departments may be disappearing. However, we may be entering a new golden age of HR where it becomes a thriving industry in itself.

For more on the new age of HR, visit out website



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