Should Your Business Outsource HR?
December 17, 2018
Of all the logistical processes business must contend with for success, the management of human resources may be among the most challenging. Hiring and internal supervision of employees are only portions of what HR encompasses; there are also the core mechanics of the company, such as payroll and taxes. At times, meeting these basic obligations can consume a disproportionate amount of time and resources. So, should you outsource those functions to improve operations? To answer the core question of whether this is the correct choice to make, it’s first necessary to consider that there are different types of HR outsourcing. What are they?
Not All Outsourcing is Created Equal
Software, services, and consulting — these are the words to know when you want to learn about outsourcing your HR. Each represents a different level of commitment and convenience. Each is also often best suited to businesses of particular sizes, or those facing certain pressures, such as a short-staffed office.
Software outsourcing allows businesses to streamline and often automate many processes that would otherwise be repetitive and highly time-consuming, such as computing payroll and managing time cards. Even employee onboarding can be outsourced to software, creating a unified experience for new employees, and an excellent opportunity for starting staff off strong — without expending additional hours on doing it directly.
Outsourcing HRP takes this one step further. Instead of providing only software, service providers assist you with regulatory and legal compliance — such as with fair hiring or employee licensing. Placing your trust in outside knowledge allows your business to navigate some very tricky requirements. Some firms combine software and services into one package, providing robust consulting and assistance.
There is one other type of organization sometimes included in HR outsourcing: “PEOs,” or professional employer organizations. What is a PEO? Rather than providing services as above, PEOs act as the actual employer of your staff, handling all HR-related functions while you pay a fee for each employee. Because this requires a fundamental reorganization for most companies, we won’t be focusing on it here.
Determining the Appropriate Level of Outsourcing
One of the prime benefits of outsourcing some HR functions is the breathing room it grants to your team. It’s certainly true whether you are operating a bare-bones startup or a company with swelling ranks. Even when you opt to maintain in-house HR staff, it is easier to keep their efforts focused on matters vital to promoting success and the right company culture, instead of on the ever-present demands posed by tasks such as payroll. For that reason, determining when to outsource HR requires a careful evaluation of your current and future needs.
For small to medium-sized business, for whom HR can be a time-sink, an all-in-one provider of services, consulting, and more can provide the clearest and most tangible benefits. Large businesses can still rely on consulting services for compliance but may benefit from in-house staff for employee interactions. In these cases, software-only solutions can lighten the burden your HR team experiences.
At JetPay, we have the tools, knowledge, and experience to scale to meet any business’s level of need. Through JetSource, our complete HR package for businesses such as yours, we can become an integral part of your success. Having helped thousands of businesses already, we’re ready to help you, too, especially if you’re wondering “Should I outsource HR?” Contact us today to find out more.
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