Successful small businesses grow and evolve over time, often requiring the support of experienced human resources staff. When your solopreneur or small business enterprise reaches this exciting apex, you have serious decisions to make.
In-House HR Or Outsourcing: What’s Best For Your Company?
Some of those decisions are:
- What in-person vs. virtual staff do I need to grow efficiently?
- Do I hire a full-time or part-time HR pro?
- How can I make the best decisions for new employees (virtually or otherwise) to lower costly turnover rates?
Here are five things to help you facilitate those questions and learn more about HR outsourcing - its pros and cons. We also recommend connecting with a virtual services provider for more personalized guidance around what may be best for you now - and into the future.
5 Things To Think About Before Outsourcing HR
We frequently encounter business owners who aren’t quite clear about where human resources-related tasks begin and end. This is especially common if you’re more of an entrepreneur than a business magnate; you may be unclear about what an HR person does.
In general, HR staff oversees the entire lifecycle of employees. A brief list of general, small business HR tasks include:
- Creating detailed, accurate, and powerful job descriptions.
- Posting and tracking job openings.
- Review applicants and schedule interviews (they may even perform the first round of interviews for you, preserving your time/energy for the best prospects).
- Creating or providing vendor materials regarding benefits, employee handbook, etc.
- Onboarding new employees.
- Processing payroll and employee benefits.
- Keep track of reviews, raises, performance data, etc.
- Serve as a mediator between employees/managers/administration.
- Conduct exit interviews when employees move on, retire, are laid off, or are terminated.
As you can imagine, it doesn’t take much before solo business owners or partnerships need outside help to take over these ever-increasing tasks.
Once that bullet list overwhelms you, or you find that your receptionist or assistant lacks the HR expertise required to meet your growing company’s demands, it’s time to ask/answer essential questions to drive your next step.
How much time do you spend on HR tasks?
It’s time to think about outsourcing HR services when:
You spend at least eight hours (one full business day) or more weekly on human resources-related tasks. If you have a receptionist, office manager, or a non-payrolled spouse/partner handling the company’s HR needs, they’re spending 12 hours or more per week on average.
This is not a productive use of time, and it takes away time and energy better spent on growing and strengthening products and service offerings.
Worry about increased risk and liability
Very few non-HR professionals understand the ins and outs of federal and state labor laws. So, the more you divvy up HR tasks between non-HR experienced staff, the greater your risk. Failing to uphold labor laws or any noncompliance infractions puts you and your company at risk of fines, penalties, or crippling litigation.
Many business owners are surprised about the relief they feel when they finally hire HR support. They only realize how much they are worried about potential violations or consequences after the weight is lifted.
You know you need HR support but can’t afford it
This is almost always untrue. If you know you need HR support, odds are you can afford it, but you need the right HR strategy. All kinds of options free you from having to hire a full-time employee. If you “know” you can’t afford it, odds are you can’t afford an in-person HR employee but can find a way for virtual services to alleviate the burden until you can.
For example, virtual HR services are available part-time, seasonally, or in bookended time frames to create programs, protocols, and systems that can operate independently between their services.
The company culture is suffering
A positive company culture is essential when it comes to attracting and retaining the best, brightest, and most pleasant to work with. Healthy and experienced employees will jump ship quickly if they feel the company culture is oppressive, negative, or dysfunctional.
According to HR Digest, a positive company culture is proven to:
- Increased employee engagement, productivity, and retention.
- Catalyze employee motivation, commitment, and work engagement.
- Create a sense of employee pride and ownership, which can translate into increased loyalty and dedication to the organization.
HR professionals work closely with employees, learning more about what’s working and what’s not, and can help you turn that around in a short amount of time.
You need to hire more employees but don’t have the time
Yikes! If that isn’t a sign you need 911 HR support, we don’t know what is. There’s almost no worse feeling for a business owner than to know their brand is doing so well, they need to expand while simultaneously feeling the lack of time or energy to hire the personnel they need.
This is the most significant indicator that it’s time to consider outsourcing HR and other services ASAP. By getting instant support in the form of experienced HR and other administrative professionals, you’ll have the time to step back and begin envisioning how to scale your business to the next level. And you’ll have the expert support from your HR expert along the way.
Let ZenRes Guide Your HR Outsourcing Process
ZenRes is a Bay Area virtual services provider that works diligently with local small business owners to grow and scale their businesses wisely and with close attention to the bottom line. We see firsthand how virtual HR services free up clients to finally create the full-scale vision of their business.
Schedule a consultation with us to discuss the right HR outsourcing package for your company. We can also assess your business needs and see if other virtual services can free you up - and save you money - so you can get back to doing what you love the most while hiring the next best candidates meant to take your business to the next level.