Every company, large or small, must devote at least some time and energy to Human Resources (HR) administration.
Keep HR Internal or Send It Out?
Small and medium businesses, however, often have difficulty meeting their HR needs, particularly during periods of rapid growth. As Forbes reported in 2018:
“Smaller companies often don’t have the budgets to support the necessary personnel, and…in many cases, even if a business is able to staff an HR department, it’s not always considered the best allocation of resources.”
In these situations, HR tasks usually fall to owners or employees who already wear many different hats. This pulls attention away from the company’s mission, leading to lost productivity and lost revenue. Partnering with an outside HR firm, however, allows you and your staff to focus on your work while providing several other key benefits.
Benefits of Outsourcing
The first (and most crucial) is ongoing compliance with local and federal employment regulations. Mistakes in this area aren’t just annoying; they can incur expensive fines and leave the company open to lawsuit. Turning these tasks over to an HR professional gives you peace of mind and protects both employer and employee.
HR outsourcing can also give you access to the same administrative tools used by large corporations. Some HR companies offer user portals and mobile apps that let employees and owners easily submit documents and manage their benefits.
One of the toughest challenges for any business owner is hiring the right talent: someone who knows their stuff and fits well with the company culture. Leaving the preliminary stages to an HR provider lets you avoid wading through a sea of resumes and instead brings the best candidates right to you. Once you’ve made your decision, the external HR team can handle all the paperwork, so your new employee can get right to work.
Bumps in the Road
On the other hand, working with an outside company can have its drawbacks. Outsourcing HR means bringing another player into many employer-employee processes. This creates more possibilities for miscommunication, particularly if you work with a larger HR firm. If you don’t clearly communicate your hiring needs, for example, you will end up with the wrong applicants, while potentially driving away the right ones.
For current staff, badly managed outsourcing can negatively affect productivity and morale. Mistakes and delays caused by miscommunication, as well as increased distance between employees and management, leave employees feeling ignored and frustrated. Meanwhile, employers may not be made aware of problems when they are developing, only to have them become much a larger crisis down the road.
Make Sure HR Works for You
Fortunately, many of these issues can be avoided by taking the time to find an HR team that understands your unique needs and is committed to your success. At Watermark Ventures, our expert HR team will work with you to lower administrative costs, and keep payroll and benefits management running smoothly, while ensuring constant legal compliance.
Where to Go from Here
The question of outsourcing HR functions is one every company should examine. If you’re struggling to cover HR tasks or just tired of paperwork getting in the way of your real work, contact Watermark Ventures to start transforming your HR from an annoyance to a true asset.