When Is Outsourced HR the Right Choice?

Outsourcing HR might sound like heresy at a time when the focus on building workplace culture and thoughtful employee journeys has never been stronger. But for small and growing businesses without an established HR team or practice, outsourced HR services can be the most considerate people move an organization can make. 

What Are Outsourced HR Consulting Services?
HR consulting services is the process of leveraging a third-party provider to address any area, or all areas, of the day-to-day employment lifecycle:

  • Onboarding 
  • Payroll administration 
  • Benefits administration
  • Training and development
  • Grievance management 
  • Workforce compliance
  • Offboarding

HR consulting services can save businesses time and money, but it also needs to be a strategic win for the workforce. Taking good care of employees and their needs is essential to workforce productivity in the short and long term. Employees that are appreciated and supported are more committed, harder working, and stay longer. Businesses considering HR outsourcing want to examine if they are the right size for HR consulting and what level of in-house attention their teams want and need to succeed. 

What Business Size Is Best for HR Consulting Service?
Fractional HR outsourcing is a great option for small and mid-size businesses that are growing quickly and struggling to keep up with workforce administration. It’s also a great option for newly formed companies operating with overstretched leadership teams and little to no official HR department.

In both of these cases, the businesses rarely have dedicated HR resources. In fact, the work of HR is often placed on the plate of a team member who already has their own full-time job, and HR is only a side gig. These are the scenarios where HR consulting can make a powerful impact, infusing workforce administration expertise into an organization in need of dedicated, hardworking staff. 

Where HR Consulting Services Shine
While outsourcing can save a business money, the most important value of HR consulting services is the work it does to reassure, inform, guide and foster the talent a business relies on and manage the more complex aspects of workforce oversight. That work includes:

  • Benefits Administration and Understanding. Employees depend on employer support and insights for several key aspects of their life. First there is the financial well-being factor. Through compensation and investment opportunities, such as insurance and 401(k) savings, employers are a major contributor to an employee’s financial state of affairs. Having professionals, like HR consultants, who understand compensation and benefits and speak to those challenges is a huge bonus to employees and a relief to internal team members who had been flooded with program questions they could not answer. 
  • Employee Relations. Maintaining strong employee relations is key to building a productive, engaged workforce. That requires addressing worker complaints in a timely manner, supporting teams through change, and resolving conflicts. Businesses that do not stay on top of complaints or other issues put their businesses at risk of turnover or worse, including lawsuits. 

Small and growing businesses often don’t have team members with enough time to dedicate to the thoughtful work of moderating and resolving employee relation needs and challenges. HR consulting experts, who have decades of experience managing every kind of tricky workplace complication, can efficiently do this work, ensuring employees’ needs are never put on the back burner or clumsily handled by another team member. 

  • HRIS or other systems implementation. From HRIS systems to payroll tools, it takes plenty of technology to manage employees today. HR consulting services are a way to leverage HR system implementation knowledge and experience to ensure new technologies are customized to internal needs and implemented with minimal workplace disruption. In addition, HR consulting teams can train and support managers on HR tools to ensure strong engagement. 
  • Workforce compliance. The laws and regulations governing employees and the related reporting and taxes change all the time. For example, a state might increase the minimum wage, require sick or parental leave days, add new reporting requirements, and more. Outsourcing compliance work can save businesses tremendous time and headaches by staying ahead of ever-changing legislation. 
  • HR Policy and/or Handbook Creation
    An effective, high functioning workforce depends on thoughtful policies and rules that govern employment and workplace engagement. In recent years, COVID and remote work policies were added to employee handbooks nationwide. Building and updating those policies and creating the handbook to house them all takes research, time, feedback and optimization. Leveraging HR consultants with extensive experience can make a time-consuming internal process a highly efficient outsourced process. 
  • Coaching. HR has long been the counseling wing of the business– the place where employees and leaders go for advice on how to handle tricky situations and conversations. For small businesses without dedicated HR pros, HR consulting arms an organization with a thoughtful expert to coach teams and individuals through workplace challenges.

Is HR Outsourcing Right for Your Small Business?
To determine whether HR outsourcing fits a business’ employment and workforce needs, here are the questions to consider:

  • Does the business have an established HR function or a makeshift one?
  • Are HR services lapsing due to overworked internal teams? If so, what effect is it having on internal teams and external compliance?
  • Is the demand for HR support large enough to warrant a full-time HR hire? If so, could one hire handle the workload or would that new hire need support?
  • Is a lack of HR resources keeping your business from taking important steps like building employment policies and/or implementing HRIS systems?
  • Is there frustration from employees who don’t know how to address on-the-job challenges?

The best feature of HR consulting is its scalability. Workforces and businesses change, grow and can even shrink. HR outsourcing can be as big or as small as a business requires. Perhaps it’s a fully outsourced function for a new business getting off the ground? Or, maybe it’s part-time consulting for an internal team facing rapid workforce expansion. Either way, the benefit is having a highly seasoned professional (or team of professionals) who knows the work and is ready to deliver on the job. Learn more about your options for outsourcing HR services– or contact us and we’ll walk you through it!

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