One of the things we get asked is when and how you should outsource your HR. There’s no right or wrong reason as to when – you might be a start up, or you may employ 50 or more staff, it’s really up to you in terms of what you want HR to be in your business.
Top Ten Things to Consider When Outsourcing Your HR Function
Here are 10 key things you should do:
Is a long-term contract right for you? Many companies, ourselves included, offer retained services. Do you want to be tied in for 1 year, 3 years or 5 years? These types of contracts always suit the HR provider, but is it right for you?
You have no way of knowing what your requirements are going to be over the medium to long term – they could easily change from one month to the next. Instead, look for a contract that’s no longer than a year and includes flexible terms, like an hourly or monthly rate that reflects your use of the service. That way you won’t end up paying for services you don’t need or use.
Whether it’s the right thing to do or not, most of our retainer contracts all have a 90 day notice period, ensuring customers are not tied in long-term.
I’ve attended hundreds of networking events over the years and it always amazes me the number of HR companies and Consultants who strike fear into people.
Employment law can appear complicated and employment tribunals are expensive, so you might think that buying tribunal indemnity insurance is an easy way to gain peace of mind. The reality is that there are many steps in the process to an employment tribunal, and if you have sensible HR policies and procedures in place, you are at a very low risk of losing a claim. If you choose a supplier just because they offer tribunal indemnity insurance you could be paying an unnecessary premium.
What does the HR company really supplier really mean by ongoing dedicated 24/7 HR support? You wouldn’t take legal advice from a call centre, and I wouldn’t encourage you to take HR advice from one either. How can you guarantee the person in the call centre is trained and qualified in the HR areas you’re asking for advice? getting an HR advisor trained in the area you’re querying.
Effective HR support is about building lasting relationships. You should have a dedicated named Consultant or team of Consultants who work with your business and who know you, your company and your team. We pride ourselves on really getting to know our clients, and if you’re having to speak to someone new every time, you’re always having to start at the beginning, and this does nothing to fulfil you with confidence.
You should be able to have a face-to-face meeting whenever you want one – it’s the most effective way for your Consultant to get a full understanding of your business and your people. If you had in-house HR support, this is what you would do. I would avoid providers that restrict meetings simply to keep their own costs down – we love getting out to see our clients.
You should be able to get admin support around recruitment, job offers, new hires, onboarding, general day to day HR admin and exit process.
Emma in our team is our dedicated HR administrator, and this allows our Consultants to focus on the complex cases.
Many providers will only give you basic and ‘safe’ HR advice, leaving you to assess the risk and decide what action to take. If you are outsourcing HR to save yourself some time, this doesn’t help you at all. You will get frustrated with a provider that ‘sits on the fence’ or tells you what you can’t do, rather than what you can do. Ask if the provider will draft meeting scripts and letters for you or make an advisor available to help you with a difficult disciplinary issue, for example. Make sure you’re very clear about what is and isn’t included, and what service will incur extra charges.
Check what else you get – information such as newsletters, EBooks, updates to your HR documentation, seminars and workshops. These are all things retained clients should get as part of their agreement.
This is an important one, and before I built a team, my laptop and phone would go with me on holiday to ensure I could still service my clients. Not ideal, but when you start out this is what you have to do. What provisions are in place for you if your Consultant is on holiday? You want peace of mind you’re still getting the service you’re paying for – I’d be surprised if you get a discount if your Consultant is off!
Find out what other companies are using the provider, and ask for contact names in at least two.
The HR provider should be able to provide this, and many might have on their website or marketing material, or third-party websites like the Best of, or Trust Pilot.
I hope this helps you reach a decision when it comes to looking for an HR provider. You can also check out this video which should hopefully help in your decision making.
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Feel free to reach out if there’s anything on your mind we can help with.