HR outsourcing – why your Company should consider it for some elements of your People programme
HR outsourcing – the process of delegating a company’s HR business process or part of, to a third party or external agency is a hotly debated topic. There are many pros and cons, and it is not the ideal solution for all, but certainly holds great benefits in the right conditions.
Here are 10 reasons you might want to consider using HR outsourcing in your business.
- No salary costs to impact your EBIT – There are significant savings to be made in outsourcing and not only do you not pay the full-time salary or hiring fee of an outsourced resource; you often get access to a wider range of skills than you might otherwise be able to afford with an internal appointment. Often with a small business there is a limited skill set internally. To bring in a dedicated professional could be expensive to the business and you may not need to have that resource on a full-time basis. As an example, a full-time HR Manager could cost your business over £50,000 in salary alone not to mention the benefits, sick pay and pension contribution costs associated with the role.
- Freedom to focus on core business, cash and strategy – Outsourcing enables you to focus on your core business processes while delegating sometimes mundane time-consuming processes to external agencies. As a skilled CEO/MD of a small business you may be capable of running recruitment campaign or carrying out a disciplinary investigation but is this the best use of your time and skill? Getting it managed externally means you can focus on the day-to-day operations of your business where you are needed.
- Free up internal resource – Freeing up internal resources that could be put in to effective use for other purposes is also one of the primary benefits realised when companies outsource. Often staff in small business have to multi-task but it is not always playing to their key strength. By outsourcing activity, you allow your salaried staff to do the job they are best skilled to do which benefits the bottom line.
- Get the job done quickly – If you need to get going on a project straight away it might take weeks or months to hire the right people, train them, and provide the support they need. Outsourcing will mean that you can respond to market demands quickly and professionally.
- Agile Short-term solution – Sometimes a business needs to resource a short-term project and outsourcing can facilitate this need. Further, outsourcing also enables companies to realise the benefits of re-engineering. As businesses grow, demands on staff can change and outsourcing enables you to grow your business without the risk of taking on personnel only to have to release them at a later date because their skills or level no longer match your demands.
- Facilitate growth – Some companies also outsource to consultants such as HRO help them expand and gain access to new market areas; or set up scalable infrastructure and processes that can then be operated internally thereafter.
- Increases compliance with employment laws. Several employment regulation changes are made every year, including several pertinent issues such as brexit, taxes, data protection, worker status, wrongful termination, and even sexual harassment. Non-compliance with these laws often result in costly fines, not to mention the headache and the hassle of dealing with a lawsuit.
- Bring in new skills – Business growth can often dictate the need for new skills that existing resources cannot respond to. You may not have the skills internally to carry out a TUPE transfer, develop a skills audit process, design a development programme or acquire another business and outsourcing can resolve this problem.
- Training your staff – Outsourcing complicated activities can enable the development of internal staff. By bringing in experts in a given field you can have your own staff shadow them and learn new skill sets. Ultimately the external resource may not be needed, and your own staff will be trained sufficiently to manage.
- Expertise to compete with your larger industry competitors – Most small firms simply can’t afford to match the in-house support services that larger companies maintain. Running a dedicated human resources or marketing department is often out of the question for a small business. Outsourcing can help small firms act “big” by giving them access to the same economies of scale, efficiency, and senior expertise that large companies enjoy.
HRO can help with Outsourcing
At HRO we can provide a variety of outsourced operational HR support and outsourced people strategy support options whether it be a retained service or a specific project. We can carry out internal investigations, restructure consultations; engagement surveys, people projects, provide management support or assist through coaching. To find out more about our services contact hello@HROptimisation.co.uk
Hannah Powell
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