Human resources organizations are a vital part of any company, regardless of your size or industry. In the past, HR departments were isolated entities that largely handled administrative tasks. However, today’s HR department should be a strategic partner that advocates for employee interests and plays a crucial role in business decisions.
One of the best ways to get the most out of your human resources department is through HR outsourcing services. In this blog, we’ll answer the question, “why outsource human resources?”, provide a human resource outsourcing definition, and explore how outsourced HR can help grow your business.
Obstacles Facing Human Resources Departments
As a business owner, you encounter a wide variety of obstacles that may lead you to seek HR outsourcing services. We’ll take a closer look at each one below.
1. Lack of Employee Engagement
Research shows that engaged employees exhibit greater productivity than those who feel unfulfilled and stagnant. It can be difficult to create and deploy strategies that encourage active engagement, and it takes time for these sentiments to become ingrained in company culture.
2. Difficulty Attracting & Recruiting Talent
Another major hurdle facing human resources departments is a tight labor market, which has led to difficulties surrounding talent acquisition. With so much competition, it’s crucial to be efficient and intentional when recruiting top talent. Your recruiting messaging should match that of your overall brand, and you’ll need to be strategic when choosing the channels used for talent acquisition.
3. Struggling to Retain Talent
As the workforce continues to evolve, compensation isn’t always enough to retain good employees and keep them satisfied. Rather, it’s a piece of the larger puzzle that also includes company culture and the overall employee experience.
One of the best ways to integrate new hires into your company culture is through thoughtful and intentional onboarding. Creating a gratifying experience from day one will help you retain talent and keep employees engaged and fulfilled.
4. Strained Management-Employee Relationships
Another obstacle that human resources organizations face is maintaining open lines of communication between management and the larger workforce. Building strong relationships between these two groups is crucial to maintaining employee engagement and productivity.
5. Delivering Training & Professional Development
Human resources professionals are largely responsible for facilitating employee development and professional growth. But balancing these tasks with their other responsibilities can be overwhelming.
Training and professional development help you offer a competitive advantage while also creating positive sentiments among your employees. Seeking help from management and leveraging training technology can help reduce the burden on HR, but getting this support may prove difficult.
Benefits of Outsourcing HR Services
There are many advantages of outsourcing some or all of your company’s HR functions. We’ll take a closer look at how outsourced HR can help grow your business in the following sections.
1. Saves You Time & Money
One of the main benefits of outsourcing HR services is that it frees up time and energy for your internal human resources staff. Outsourcing also gives management the opportunity to focus on revenue-generating activities that have a significant impact on business growth. Internal HR can also be quite costly when you factor in HR payroll, talent acquisition, salaries, and training costs.
2. Experienced HR Management
Outsourcing human resources also gives you access to experienced HR management founded on knowledge and experience. Advisors that specialize in human resources can handle everything from employee handbooks and training to policy and procedure enforcement.
These experts can also assist your managers in monitoring employee performance and professional development. This provides supervisors and executives with more time to focus on important activities that support business growth and achieving goals.
3. Expert Compliance & Risk Management
If you’re still wondering, “why outsource human resources?”, another benefit is the knowledge that HR specialists bring to compliance, liability, and risk management. Companies that specialize in human resources employ experts who focus on areas like payroll, employment, and labor laws.
It can be very difficult to keep track of ever-changing federal and state regulations surrounding employment. And while you may feel overwhelmed, remaining compliant helps you protect your employees and avoid significant financial penalties. However, you won’t have to worry about these issues if you choose HR outsourcing services.
4. Improved Recruiting & Reduced Turnover
Companies that specialize in outsourced human resources can also help you create a pool of qualified prospective employees. Depending on the amount of assistance you need, HR outsourcing services can help you with everything from recruiting and interviewing to hiring and onboarding.
5. Access to Advanced Technologies
Another benefit of outsourcing HR services is access to advanced technologies that help streamline human resources administration. These products can be very expensive, so you’ll also save money that can be budgeted towards other endeavors.
6. Better, More Inexpensive Benefits Packages
Outsourcing human resources can also give you access to superior benefits options that are usually reserved for large corporations. This is a great way to incentivize new talent and reward existing employees for their hard work and dedication.
How Outsourced HR Can Help Grow Your Business
Perhaps the biggest benefit of HR outsourcing services is the ability to grow your business and achieve your goals while simultaneously enriching company culture. We’ll examine the four main types of human resources outsourcing and how they can boost your business below.
1. Human Resources Transformation
Human resources transformation repositions HR departments as internal organizations that support strategic objectives through human capital management. Rather than existing as a functional or administrative tool and gatekeeper of information, HR becomes a strategic, vital entity. This may involve a large investment of time and money up front, but the expenditure is well worth it in the long run.
When transformed, HR organizations can advise their businesses on a variety of subjects that support overall growth goals, including:
- Human resources-centric business developments
- Whether there’s enough internal talent to take on new industries or markets
- How work should be done and if any of it can be automated
Transforming your human resources department into a strategic partner requires you to complete a variety of tasks, including:
- Standardizing processes based on best practices
- Revising the organization’s functional structure
- Rewarding significant employment milestones
- Embracing and implementing new technologies
2. Human Resources Enablement
Also known as people enablement, human resources enablement leverages resources, technology, processes, and learning to support employee growth and meet your organizational goals. Like HR transformation, enablement positions human resources departments as integral business partners.
Human resources enablement also gives employees the resources to learn and grow in the manner that works best for them. Rather than forcing them into a fixed training method, HR enablement provides guidance and promotes professional development that helps employees reach their goals.
Enablement benefits your business because improved skill sets and productivity positively impact customer satisfaction and overall revenue. It also has a positive impact on employee morale and heightens engagement because your staff feels respected and empowered.
Your business can promote human resources enablement in the following ways:
- Providing the best training tools and resources
- Incentivizing professional development opportunities
- Offering performance recognition for high achievers
- Following up with employees to reinforce learning and engagement
3. Organizational Readiness
Human resources departments are also responsible for organizational readiness, which is the process of preparing employees for impending changes or transitions. Giving staff the knowledge, skills, and experience they need to adapt to new circumstances helps transitions go smoothly. These changes can include initial public offerings, mergers, acquisitions, and divestitures.
Organizational readiness starts with identifying employee needs and using them to support the implementation of new structures, technologies, and processes. Clear, timely communication regarding upcoming changes is key, along with job security reinforcement. Ultimately, defining roles, responsibilities, and relationships before transitions can relieve turmoil, resistance, and distrust.
If you’re not sure where to get started, consider conducting an organizational readiness assessment. This is a valuable first step in gauging whether your company is prepared to undergo major changes that will significantly impact your organization. Additionally, it can help you determine whether the transformation will be successful and prepare you for potential impediments.
4. Technology Platform Adoption
Access to and implementation of human resources technologies (whether in-house or through HR outsourcing services) is a key element of a transformed HR organization. Cloud-based technology allows human resources teams to automate a variety of administrative tasks, including time-off requests, onboarding, and initial training.
Technology platform adoption also helps streamline continuing education, recruiting, performance reviews, engagement, and more. Best of all, it cuts overhead costs, promotes continuous innovation, and helps position human resources as a strategic partner.
However, implementing human resources technology (whether in-house or via outsourcing) can be difficult due to employee resistance. As a result, it’s important to give your staff concrete examples of how new technologies will make their lives easier and save valuable time. You’ll also need to provide:
- Initial and ongoing training
- Easy-to-access technical support
- A platform for sharing shortcuts
- Frequent opportunities for feedback