HR Outsourcing: Providing Small Businesses With Big-Company Expertise

By | December 12, 2014

If you’re running a small business, but one problem small businesses have is hiring. In this article, you will discover how outsourcing your HR can be helpful in getting over one of the biggest hurdles in small business management & expansion. Let’s read on…

It is a well-known fact that when HR functions are outsourced to a reputable company, the results can be fantastic. Not only does this often cost a fraction of what it would to employ fulltime employees, but it also provides companies with access to top-tier HR professionals.

Many small business owners, however, may think that this type of HR solution is available only to large companies. If you are one of these people, it may surprise you to discover that small businesses stand to enjoy many benefits from outsourcing their HR needs.

Alleviate Pressure on Management

If you are a small business executive, you probably know firsthand that problems often find their way up to management. An employee dispute, for example, can quickly escalate if not handled properly at the outset. This may then require attention from supervisors or even executives.

Any time that you or your management team spends addressing such issues is time spent away from other vital duties, and if this continues for too long, the business will certainly suffer. Turning these kinds of problems over to an outsourced HR professional alleviates this pressure on your managers, allowing them to remain focused on leading the company.

Long-Sighted Strategies and Solutions  

New businesses are presented with unique HR opportunities, as they can build their staffing policies from the ground up. Unfortunately, many executives and managers may not have the tools to create such policies effectively, which can lead to long-term problems.

If, for instance, pay grades are not accurately mapped to job descriptions from the beginning, employees will not receive appropriate compensation for their work. Underpaying workers may lead to the departure of good employees, and overpaying can result in unrealistic salary expectations.

Retooling ineffective employment policies in an established business is very tricky. Because of this, employers who wish to build a good organizational foundation from the beginning may find it very beneficial to outsource their HR needs.

Reduce Technology Costs

There are a number of great Human Resources Information System and Human Resources Management System solutions on the market. These can help businesses run their staffing functions smoothly and maintain proper security protocols for sensitive employee information.

This type of software, however, can be prohibitively expensive for many small businesses. Companies that choose to outsource their HR can take advantage of the fact they will be provided with access to advanced HR systems without the hefty burden of purchasing them themselves.   

Stay on Top of Changes in Employment Laws

Many employers have experienced legal issues regarding employees. Frankcrum notes that in 2013 alone, more than 93,000 discrimination claims were filed with the Equal Employment Opportunity Commission. Other types of employment litigation can involve:

  • Sexual harassment
  • Breach of employment contracts
  • Fair Labor Standards Act violations

Any allegations involving these issues can result in serious resource depletion for a small business. Even if the company is cleared of any wrongdoing, the investigations will still take a substantial toll, as they often bring down employee morale, take up significant management time, and cost the company in lost work.

This can all be avoided if a company outsources its HR to a professional company that has the experience necessary to effectively prevent this type of litigation from arising.

Outsourcing HR functions are not just the domain of large businesses. Small companies may enjoy many benefits from pursuing this option for their HR needs. If you have been looking for ways to increase efficiency and help your business investments go further, this may be an ideal choice for your company.

Author: InvestorBlogger

Investorblogger.com takes you on a 'Random Walk To Wealth' through money, investing, blogging and tech. We'll explore my insights, mistakes, and experiences together.