If you’re in a leadership position at your company, you know all too well how frustrating it is to manage non-revenue-generating tasks. In fact, it’s easy to spend up to half your time at the office on administrative needs, including many HR functions.
Most growing companies address this problem by removing themselves from the process. Specifically, they outsource their HR needs to a professional firm that can manage payroll, benefits, and other needs quickly and efficiently.
If you run a quick Google search on outsourcing HR, you’ll find countless articles about why you should have outsourced 5 or even 10 years ago. But, how do you know if outsourcing is actually the right move for your company? It’s all about asking the right questions before you commit to the process. Below, we outline four questions you should ask yourself before outsourcing your HR needs.
How Big is Your Company?
While there is no magic size that is “right” for outsourcing HR, size will play a factor in your decision. And, because the right size will vary for every company, a better question may be “Are administrative processes slowing down your business?” If they are, it’s likely time to outsource.
There’s a sweet spot for HR outsourcing that typically begins around 10 to 15 employees and ends once you grow so large that you need an in-house HR team (typically around 80 employees).
Can You Afford to Outsource HR?
This is a more practical consideration, but an important one nonetheless. Outsourced HR pricing varies according to the company you select. However, the cost typically ranges from between 2 and 10 percent of wages. Some outsourced services offer pricing per employee, which may make more sense for some organisations.
It’s best to consider your true costs, both wages and otherwise, to determine if you can afford outsourced HR services. And, if you can, it’s likely an investment worth making.
Do You Want to Relinquish Control of HR Functions?
It can be difficult to let go of some essential functions in your business. This is especially true for smaller businesses that want a hand in every part of the company as it grows.
If you’re comfortable with losing some flexibility in HR for efficiency purposes, outsourcing is likely a good idea. After all, HR professionals are experts so in many cases, relinquishing some control is likely to benefit your business.
What Kind of HR Professional do You Need?
There is no one kind of HR professional. HR professionals will have experience in a variety of types of HR and as such, you must choose a company that offers a breadth of experience in many areas or, ideally, ample experience in your particular industry.
Similarly, the HR professional you choose must align well with your business and the processes you have in place. For example, some HR professionals rely heavily on technology whereas others will want to run business in a more traditional, face-to-face way. Regardless of which you prefer, it’s important to consider all aspects of your outsourced HR options before making a selection.
Is it Time to Outsource Your HR Needs?
If you’ve been considering outsourcing HR as your company grows, now may be the time to do so.
At The HR Booth, our team offers decades of combined experience in many facets of HR and in different industries. As such, we draw upon a wealth of knowledge to ensure your company runs as it should. Moreover, we collaborate with you to ensure we’re carrying out your HR functions according to your preferences, allowing you to maintain some influence in the process.