Published On: Friday, 08 June 2018

Does it Make Sense to Outsource Your HR?

Does it Make Sense to Outsource Your HR?

HR - Over the past five years or so, the continued growth in the economy has been positive, yet at the same time has brought along challenges, in particular when it comes to the people side of business.

Human Resources (HR) continues to go through a transitional phase with regards to how it is viewed, what functions or set of activities are involved and the impact from external forces such as regulations, employee expectations, and the wide-spread skills and labour shortage.

When you are a small to medium sized business you may not have a dedicated person or department to oversee HR functions, and simply react to immediate needs and challenges on an as-needed basis.

So how do you ensure that not only the basic HR tasks such as payroll, recruitment, compensation and benefits management, and general administrative duties are covered, but also the strategic side of HR including your company culture, employee engagement, and professional development?

As a first step, efficiencies can be attained by looking at how basic administrative duties can be streamlined. Can some of the functions (payroll and benefits administration) be outsourced or done through a technology based HR management system, and if so, which is the best method for your business?

By allowing your managers to move away from the time consuming administrative functions, it allows them to spend more time on performance management and employee engagement which in turn may reduce your turnover and time spent on recruitment.

If a technology-based system is not right for you, can all of your HR or specific parts of HR be outsourced to allow you to focus on other important business matters. Outsourcing HR functions to professionals with the expertise to perform tasks more effectively, and in many cases more economically, makes sense.  

Outsourcing is gaining in popularity, as employers realize the benefits of bringing in HR subject matter experts - after all you don’t repair you own car or do your own electrical work. As an example, recruitment has been outsourced by many companies for years, particularly at the executive level.

This trend continues to grow as many organizations now outsource recruitment for entry level positions as well, since it is a very time consuming task. These days, HR outsourcing goes beyond the “simple” administrative and recruitment tasks, and now encompasses more of the professional services like compensation programs, policy and job description development, and performance management systems.

Outsourcing can also ensure that you are both aware of and meeting all legal and legislative HR changes. For example, how has your organization addressed the hot subject of the day - the upcoming legalization of marijuana? Does your Employee manual have a policy that addresses impairment in the workplace, or the use of medical marijuana? Having an external HR professional advise you and keep you informed can save you from issues in the future.

Outsourcing is not new, what is changing is the expansion in the number and type of services that organizations are willing to outsource, ensuring core and strategic HR functions are met while allowing owners/managers to focus on the success of their business.

Christine Willow is a Partner at Chemistry Consulting.