Why Small Businesses Can Benefit from Contracting Out HR Activities

Human resource management, HR, can be a daily frustration for small businesses. Precious time that might otherwise be spent generating revenue is routinely wasted on various human resource activities that would be more efficiently performed by an experienced HR professional.

A number of companies are beginning to realize the benefits of outsourcing time-consuming activities such as recruitment, payroll and employee relations.

Deciding whether or not to outsource demands careful deliberation. In the long run, it can save you time and money, but outsourcing HR is not appropriate for every business model.

Access to skills and knowledge

It is not common for a company of fewer than 50 employees to have a dedicated HR team. Rather, all HR-related duties usually fall to a manager who is expected to possess all the necessary skills and knowledge of an HR professional. This is a daunting task, especially when you consider the extensive legislation that HR professionals are expected to adhere to.

For a manager with a number of other responsibilities, HR duties can take a back seat and aren’t always performed adequately. In this respect, small businesses can clearly benefit from outside assistance. HR professionals have specialized expertise, obtained through years of practice. Outsourcing gives small business owners the benefit of this knowledge, freeing up valuable time within the organization.

Improved compliance

Adhering to the letter of the law can feel like a full-time job in itself.  Employment laws are an ever-changing forest. Failing to comply with these laws can have very serious consequences. Outsourcing your HR needs relieves any lingering stress that you may be vulnerable due to your hiring, firing or health and safety processes. When you consider the potential costs an Employment Tribunal claim might incur, the price of outsourcing seems negligible.

Access to the latest technology

Small and growing businesses may not have the money necessary to invest in the latest, most up-to-date technology to run their businesses. One of the major benefits of outsourcing HR activities is that an HR services supplier will offer this technology meaning you can benefit from on-line holiday booking, payroll and other HR systems without the upfront expense and ongoing operating costs.

Improved employee recruitment

The right candidate can be immeasurably valuable to the success of a business. Recruitment is an area that HR professionals have down to a fine art. They can help with the slow, often tedious process of attracting the best candidates and interviewing them appropriately. They know where to post job listings, how to reach the most qualified individuals and what questions can and cannot be asked during the interview stage.

Reduced employee turnover

When HR processes run effectively, staff turnover is reduced. Employees feel listened to, they feel that appropriate measures and solutions are in place and they have increased confidence in the running of the company. Outsourcing ensures that there are experts available to dedicate their time, knowledge and resources to safeguarding the smooth running of HR administration, resulting in improved company morale.

Increased focus on core business

The biggest advantage of outsourcing is that it leaves managers open and available to deal with the day-to-day running of the business. With administrative duties out of the picture, staff can focus more on what they were hired to do. This will lead to a greater rate of return and a more successful business overall.

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