Imagine being neck-deep in work and alongside, another pile of HR work on the desk that needs immediate attention. As a business manager or an entrepreneur, you might feel overwhelmed with these tasks because rather than just focusing on your work, you have a dozen things piled up that need your responsiveness for the smooth running of your business.
You might have grown the business with the sheer dedication of your colleagues. However, when they are on the verge of feeling underappreciated because of the gigantic pile of work that keeps the upper management from focusing on the well-being of the employees, that is when things begin to go downhill.
This situation could have been managed well with a proper HR department that could have helped address the concerns of your employees, take care of the paperwork, recruitment, and identify the training needs of your employees.
One cannot deny that a proper HR department can do wonders for your business. A small or mid-sized company might not have the resources for setting up a proper HR department with experts who can handle the HR issues and strategy for the company.
In this case, an outsourced HR function can resolve all these issues and develop a strong HR strategy that bolsters the growth of the single most valuable asset of your company: the employees. Here are some advantages of outsourcing the HR function to a specialist company that can help you make a better investment for the growth of your organization:
1. Cost Savings
Since the HR department does not generate revenue for the firm but deals with complex issues, HR costs can run pretty high. The standard HR department has a lot of responsibilities apart from just hiring and payrolls. It needs to have a team of people with different expertise to assure that the department is handling the taxes well, covering the benefits of the employees, assessing training needs, and conducting these training.
Thus, hiring the correct people for maintaining an in-house HR department requires paying those salaries, perks, and of course, allotting office space. At the end of the day, outsourcing this function can help your company to get an expert opinion which can grow your firm substantially.
If you are thinking of growing your firm, there are many directions you need to think in. To grow, you need to depend on your human resources to manage the growth and keep up with the strategic implementation. Alongside all of this, it is important to take care of the essential functions like payrolls, taxation, and benefits so that your employees remain motivated to perform which ultimately transforms into your company’s performance. Outsourcing this function to a specialist organization means freeing up time for tasks that are beneficial for the long-term growth of your company while making sure that the basic tasks are being fulfilled.
Furthermore, when talking about policies, a specialized HR firm can provide your company with better insurance and health benefits for the employees which ultimately saves money for the company as well as provides more comprehensive coverage that might only be available for large companies.
3. Risk Management
When it comes to dealing with people and more importantly, employees, there are a lot of state and federal regulations that protect them. Remaining compliant with these regulations can be a challenge especially with the regulations changing consistently. Inability to keep up with these regulations can result in serious monetary losses. A specialized HR firm can deal with the legal issues for you like taxation on the salaries, discrimination issues in the workplace, or compensation claims related to health and safety, or according to your compensation policies.
Furthermore, the specialized HR organization can also help you develop policies that can help attract a better talent pool for your company to grow and thrive in the industry. Audits might sound like a scary term, but believe it or not, once you outsource your HR department, their audits can help your company to improve its people management, thereby reducing the risk faced with ineffective HR policies and compliance issues.
4. Managing the Employees
Employees, as well as managers, dread the performance appraisal times. For managers, this task requires a lot of time to score, report, and communicate the performance of each employee. The employees, on the other hand, dread the unfairness that may come with overworked managers, inadequate bonuses, and a bad appraisal. The expert HR firm can take up the responsibility of monitoring the performance of your employees and compliance with the policies of the organization. The benefit: reducing the administrative workload on managers and offering a fair performance appraisal for the employees with thorough consideration of the organizational culture.
5. Firm Growth
Lawrence Bossidy who spent most of his life dealing with employees at executive-level positions at General Electric and then AlliedSignal rightly said that “I am convinced that nothing we do is more important than hiring and developing people. At the end of the day, you bet on people, not on strategies.”
His quote shows the enormously important role of HR in the success of the company and in the implementation of strategies. For growing companies, growing the HR department can put heinous financial stress on the company.
As firms begin growing, outsourcing the HR function is a part of the strategy that allows them to source the best talent that leverages the growth as well as allowing them to allot more of their time and resources to things that escalate the company’s growth. An expert HR firm can also help a growing business to develop its HR policies that improve the firm’s ability to grow and retain talent in their organization, thereby improving productivity and performance.
In the end, your organization’s growth also depends on the type of expert HR firm that you have hired. You would want a company that knows how your HR is a part of your organizational culture. These experts are called so because they serve as partners to your firm rather than an “external” component. In the end, this is what maximizes the firm’s growth through one of the most important functions of the organization: human resources.