April 26, 2022
7 Benefits of HR Outsourcing: Streamline & Protect Your Small Business

Whether you just hired your first employee or you’ve been managing a growing team for some time, you’re researching HR outsourcing for a reason. Perhaps you:

  • Want a more affordable way to manage your people and operations than staffing a whole HR department
  • Are concerned and overwhelmed at the thought of compliance
  • Need assistance with specific HR tasks
  • Have a small internal HR department but need specialized help

Or maybe it’s something in between! Either way, enlisting the help of an HR consulting firm saves employers significant time and money, particularly for small businesses and nonprofits.

Start by determining where HR outsourcing makes the most sense for your company. If you don’t have an internal team, you might opt for a complete outsourced HR solution. If you do have an internal HR department, you might outsource specific processes like talent management, recruiting, and handbook creation.

Regardless of your needs, partnering with an HR consulting company creates efficiencies and peace of mind. 

Why Choose HR Outsourcing?

1. Save Time & Improve Productivity

HR outsourcing can save your organization time and boost productivity thanks to: 

  • Specialists who know the ins and outs of HR.
  • HR systems and automation.

Without a partner, you and your employees are stuck figuring out every HR matter on your own. You’re likely not HR experts, so you’ll need to spend more time researching and resolving issues. Too many requests or concerns at once could cause roadblocks. HR consulting firms can handle projects and problems efficiently.

Depending on which functions you outsource, your HR consultant will also implement technology that saves you a lot of time, money, and work — not to mention paper! For example, many organizations outsource processes like payroll or performance management.

Outsourcing HR projects and responsibilities allows your employees to focus on their areas of expertise and makes your organization more productive and profitable.

2. Lower Costs

Of course, one of the most significant benefits of HR outsourcing is how much money it will save your small business. You won’t have to hire HR employees, saving you the costs and stress of recruiting and hiring. When you hire a new employee, you have to consider their salary and taxes, insurance, legal expenses, and recruitment fees. 

HR professionals also need to attend regular education and training. Keeping everything in-house means you have to pay for and manage all of that HR technology yourself, like payroll, benefits enrollment, and your human resources information system (HRIS). This is a hefty financial commitment and typically is not cost-effective for a small business to take on.

You can contract a third party to act as your HR department and manage everything — from employee relations to training and development to technology — for a fraction of what you would spend hiring internally.

3. Reduce Risks

Employment laws and regulations are constantly changing at federal and state levels. That’s a lot for any small business owner to keep up with! And what you don’t know can certainly hurt your company by opening you up to steep penalties or even lawsuits. 

HR consultants know the legal ins and outs and constantly stay up-to-date with labor laws. They’ll ensure you’re compliant by regularly reviewing vital areas, including your: 

  • Employee handbook and policies
  • Wage and hour practices
  • Benefit offerings
  • Payroll and taxes
  • Hiring practices
  • Employee documentation

You can rest assured that your outsourced HR partner will mitigate risks and help protect you, your employees, and your overall business.

4. Ensure Proper Payroll Processes

Payroll is a BIG responsibility — and without sufficient technology and trained payroll professionals, you have your work cut out for you. You run the risk of costly mistakes between employee withholdings and possible complications like bonuses and reimbursements. 

That’s why most small businesses outsource their payroll process. A third-party payroll provider will process and audit your payroll to ensure all employees and contractors are paid correctly and on time. They also offer guidance on topics like tax and benefits.

5. Focus on Employee Development

Employee growth and development are crucial to holding onto your valuable team members. When you completely outsource your HR management, your consultant will work alongside your leadership and managers to:

  • Create and manage employee performance review processes
  • Maintain employee records/files
  • Manage performance issues
  • Conduct coaching and training sessions

By focusing on employees’ career paths and helping them set and achieve goals, your HR consulting company will positively impact employee retention and morale.

6. Offer Better Benefits

Employers have to offer compelling benefits packages in this competitive job market. But if you don’t know where to look or what to look for, insurance can be costly for your small business. 

Then there’s the matter of standing out, which takes more than healthcare and a retirement plan. Today’s top talent are searching for unique perks — think offerings that save them time and money, provide work-life balance, and allow them to give back.

A reputable HR consulting firm will set you up with a cost-effective, high-quality benefit plan. They will also help you get creative and offer incentives, from wellness solutions to team volunteer opportunities to no-meeting days. 

7. Gain a Fresh Perspective on Your Organization

You are passionate about your business, and that’s a beautiful thing. But sometimes, you need someone to help you take a step back and see what you might be missing — especially when it comes to your people and operations.

Perhaps you want to scale and are wondering how you can maximize your current talent. Or maybe you’re experiencing bottlenecks but need help getting to the root cause. Getting an outside perspective can play an essential role in your company’s growth. 

Your outsourced HR partner can help you identify areas of opportunity, spot potential problems or risks, and put new strategies and policies in place to take your organization to the next level. 

Now that you understand the many benefits of outsourcing HR, you can evaluate which functions you should outsource first. If you have questions or are ready to remove the HR burden from your plate, learn more about our services or contact us at info@bluelionllc.com today!

The information on this website, including its newsletters, is not, nor is it intended to be legal advice. You should contact an attorney or HR specialist for advice on your individual situation.