Small and medium-sized businesses face challenges in their HR departments.
Many new businesses or those in their first few years of operation may struggle with demands related to compliance and taxes, making having an HR department readily available seem more appealing and logical. However, an HR department is expensive, with one salary per year for an employee clocking in at nearly sixty thousand dollars.
Luckily, there is an option. Small and medium-sized businesses can explore professional employer organizations, or in simple terms, a rented HR department. Yes, it may seem odd to be outsourcing an HR department to people you don’t know, but consider that this option alone may be one of the best choices to help your business expand.
Compliance
OK, so very few new or small business owners are fully aware of employers legal requirements towards their staff. How much sick leave do you need to pay for in the state you work in? Or, how much money do you need to put into the hiring process?
Estimating these figures can be dangerous and can lead to you or your company getting sued. Rather than risk it, hiring an outsourced HR team for a monthly fee can help you tick the compliance box, stopping you from needing to worry about fees or penalties.
Outsourcing HR
Human resources, or the HR Dept, is not an area that can usually be handled by one person. Of course, if you are looking for a specific skill set from the HR department, such as payroll management, then this is often a one-person job. The issue arises when you are trying to grow your business and need help with different HR areas, but don’t have the money to hire an entire team.
Outsourcing to experts such as The HR Dept allows you to only use the professional employer organization as and when you need it, usually covered by a monthly fee. With such a simple set-up, and with your HR managed, you are allowing your business the space to grow in the following ways.
Operational Efficiency
Data has found that 85% of businesses that outsource their HR grow faster than those that don’t. A big number to showcase! The question is, why? It’s simple. Imagine you are a small business owner who is trying to run your business, manage your staff, build customer relations, and be your HR department. Yes, wearing multiple hats can seem like it comes with the territory, but in the long term, it will leave you bogged down and worn out. Thus, there is no energy for business growth or expansion. By outsourcing to an HR team, you are increasing the efficiency of your business and yourself, which enables you to dedicate more time and effort to other areas of your business.
Better Employee Retention
The hiring process for staff is lengthy, and when you have top talent to help you run your business, you will want to retain them for as long as possible.
Companies that have outsourced HR have been noted to have higher levels of employee satisfaction, as well as better retention levels. The reason is simple: you have professionals in place to help you manage your staff, as well as all the admin, who are also there to help your company create a more positive experience for employees. The result for small businesses is a happier staff, who are more willing to continue working for your company, helping you grow faster.
Cost Savings
This was mentioned earlier in the article, but it is essential to reiterate it.
Hiring a team of HR professionals for a small to medium-sized business is expensive. Aside from salaries, you must oversee the computers, other equipment, and the office space where they work.
By hiring HR professionals on an as-needed basis, typically through a remote platform rather than paying them full-time, you reduce costs to your company, allowing you to divert more resources into marketing or developing your storefronts or online shop.
One Final Thing
It is essential to note that not all HR teams that can be outsourced offer the same level of support for your business. Therefore, aim to vet them thoroughly before hiring to assess their suitability. Check online reviews, or talk to other small business owners about the HR team that they outsource to. As before, many of these teams offer monthly payment options for their services, with no obligation, but be sure to read all the fine print before hiring.
