Why You Should Outsource Administrative HR Functions

The financial impact of taking your recruiting and HR processes for granted can be huge.

Without a skilled and dedicated workforce, your business strategy, no matter how well-planned, is useless. But finding, keeping, and managing talent is itself an essential strategy that needs attention and appropriate investment.

Successful companies realize how necessary talented people are for the success of their ventures. No longer do businesses and organizations view their workforce as mere head count but as true valuable assets – the proverbial “glue” that holds everything together. For this reason, HR processes, from recruitment and hiring to data management and payroll, has become more important to businesses.

Invest in an Effective HR Strategy

Having a motivated, well-compensated, and well-trained workforce results in increased profitability and reduced monetary loss due to employee turnover. In short, the higher the quality of a company’s HR practices, the better the economic results.

But not all businesses have the time nor the money to invest generously in its HR strategy. Small to medium-sized business, in particular, can have a hard time competing with bigger companies when it comes to attracting the right people to fill in certain positions.

5 Reasons to Outsource Administrative HR Functions

Along with the changes in economy, labor trends, and technology is the perfect solution for business owners who want to lessen expenses but still want to cover their bases (and more) when it comes to recruitment and human resource management.

Outsourcing has proven beneficial to many companies over the past years. You get the same quality HR service at a reduced cost.

Outsourcing all or some of your HR functions to a third-party provider makes sense especially  for small to medium-sized companies that can’t afford to hire additional personnel with high salaries but still want quality HR service and expertise to help transform their business.

1. Save money and time.

Outsourcing HR may seem expensive initially, especially if it involves outsourcing all functions. However, this can save your company money in the long run. When you think of the cost of operating and maintaining non-revenue-generating infrastructure and other back office expenses needed for maintaining a full-time HR staff, you can picture how much a company can save by hiring a third-party provider.

2. Focus on your core business.

When you reflect on the things you do for your business everyday, how much of your time do you actually spend on strategic tasks? It’s true that you’re busy, but are you busy about the right things? Or are you busy with administrative work?

Without having to worry about administrative HR tasks, you can focus more on planning and implementing business strategies that will push your business forward.

3. Improve compliance and minimize legal risk.

Avoid lawsuits and other employment-related litigation. Labor and employment laws change regularly. Keeping up with these changes can be difficult for many employers, especially for those just starting out. Outsourcing HR functions to a professional HR firm is one way of minimizing legal risk and improving compliance for businesses since HR outsourcing providers make it a point to stay abreast of any legal updates that can affect your business.

4. Simplify operations and improve accuracy.

A productive and efficient workplace is critical for any company. Outsourcing HR functions increases efficiency by streamlining important HR functions like payroll administration, recruiting and training, health and benefit administration and compliance management. With these administrative tasks out of the way, managers and employers can spend more time on strategic actions.

5.  Gain access to talent and HR expertise.

Outsourcing can allow you access to a wider base of talent and HR expertise at a much lower cost compared to what you have to pay to hire, train, and retain in-house HR specialists. HR outsourcing providers invest in the latest technology, stay up-to-date on best practices, and regularly train people to remain competitive. They work with many different clients who face challenges similar to yours.

Finding the balance between managing your employees and attending to the needs of your business requires effort and strategy. You want to make sure your business is going in the right direction and you also want to make sure that you have the right people to help you do it. But there are times when the process of finding and retaining the right people can affect your strategic efforts.

Outsourcing your recruitment and HR administrative functions can go a long way in helping you find that balance.

So this leads us to the question…is your company ready to outsource?

About the Author: Glori Surban is a freelance blogger dedicated to helping small business owners by providing quality content and guest posts. She specializes in marketing, personal development, and hr and recruitment topics. Connect with her via LinkedIn to learn more.