By outsourcing HR, you give responsibility to someone who is specifically trained in the practical and legal aspects of HR. The HR manager must understand where you could face liability in hiring or managing workers, and, if they oversee your payroll, they reduce your risk of a run-in with the IRS. Some HR managers oversee payroll as well. You are worried about or have experienced liability exposure.Ī skilled HR person has to have a keen understanding of hiring rules, EEOC requirements, collective bargaining agreements, recruiting and training – and they have to be able to find job candidates to fill your staffing needs. For companies with fewer than 50 employees, hiring a full-time HR representative may not be cost-effective. When you outsource HR, you pay someone else to deal with HR tasks, and you free up that much more time to work on your actual revenue-generating functions.įYI: Small and midsize businesses benefit the most from outsourcing HR services. The more time you spend trying to learn about employment law or searching for that full-time designer you need, the less you spend doing what your business does. But HR problems can be very time-consuming, taking away from revenue-generating activities. There is no getting away from the fact that, as a business owner, you have to take on many responsibilities in addition to providing the products or services for which you created your business. You’re spending too much valuable time managing HR problems. Here are five signs that you should outsource your company’s HR. If your company is growing and HR responsibilities are weighing heavily on you, outsourced HR could be the solution you need. How to know it is time to outsource your HR services You may also use the outsourced service to manage any type of insurance or retirement plans for each employee. The HR company may also be in charge of releasing all W-2s to worksite employees. In many cases, the client service agreement will ask the contractor to handle payroll by managing all withholdings and taxes. Outsourced HR services will depend on the contract between the company and the provider. When business owners try to allocate various HR tasks to other employees (such as by assigning payroll responsibilities to the finance chief or having department heads handle employee issues within their own departments), the results can be inconsistent at best, chaotic at worst. It isn’t always easy to afford someone who can handle HR responsibilities, especially for a startup. Many small businesses choose to outsource HR. To say that HR carries responsibility for your company’s success is an understatement. If you have unionized employees, HR is the liaison point between your company and the union. Your HR team is also in charge of making sure the company complies with all labor and employment laws. First of all, they’re tasked with finding, hiring, training and assessing the performance of your employees. Your business’s human resources chief is responsible for many critical aspects of your workforce.
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