Why Outsource Human Resource Management?
Most small business owners know the frustration of spending more time than they want or should on non-revenue-generating activities. From payroll and human resource management to dispute management and pay related issues, entrepreneurs can spend up to 40 percent of their precious day engaged in these necessary but time-sucking tasks.
The answer for many growing businesses is to outsource the Human Resource Management functions of their business. For most business this involves outsourcing the administration functions involved in Human Resource Management and leaving the Strategic HR in-house.
Most small businesses are under 25 employees and that means the owner is the most productive, is critical to the success of the business and has to get out there and generate sales. When small businesses outsource non-core activities they can focus on the core elements of their business and generate income rather than spend excessive time on non income producing tasks.
According to statistics in 2013, in the USA, an estimated 50% of businesses outsource all or part of their HR needs.
The Top 5 reasons that businesses are turning to outsourced HR experts are:
1. Ability to concentrate on core business - HR does not produce a product or sale, yet it can eat up a lot of a businesses time and energy. Many businesses would rather focus on their core strengths and/or moneymakers by outsourcing HR.
2. Risk Management - Human resources outsourcing firms help businesses minimize risk. Employment and labor laws change regularly, and it can be difficult for employers to remain up-to-date on regulations that affect the workplace. Outsourcing firms employ HR professionals whose purpose is to stay abreast on a variety of federal and state employment laws. HR firms also maintain and audit company policies and practices to ensure the organization and its employee's best interests remain protected.
3. Cost Savings - Running an effective HR department costs bucks, sometimes big bucks. Many organizations do the math and just decide it’s not worth it. It also allows organizations to hire specialists they could never afford to bring on-board permanently. This kind of virtual workforce will continue to find momentum.
4. Improvement in Recruitment - Recruiting top talent is an art (and a science) and a lot of HR departments are the equivalent of weekend painters. Many organizations would rather turn this critical function over a company that does nothing but recruit talent.
5. Latest information and advances - The most innovative HR-services supplier will be up on the very latest technology, legislation and best practises and will know how to utilise them to meet an organization’s specific needs.