As a growing business, you will eventually get to a point when you must decide whether to hire an HR rep internally, or to outsource your HR functions. (No small task!) And, if you do decide to outsource, you’ll have to figure out who to trust with this very important part of your business— a partner who is an expert in both the strategic and tactical angles of HR. In other words, someone who has:

The know-how to execute the tactical side and will:

  • Complete payroll
  • Comply with best practices and regulations
  • Implement benefits
  • Pay benefits bills
  • Respond to sensitive HR situations

And who also excels on the strategic side and can:

  • Create positive company culture
  • Foster employee engagement
  • Grow your team’s skill sets through training and development
  • Share strategies on building comprehensive and competitive benefit packages

The problem is, it’s incredibly difficult to find a single individual who is capable of doing both the strategic and tactical roles—and who comes without a senior-level pay requirement.

That’s where outsourcing HR administration to a professional employer organization (PEO) like Genesis HR comes in. You’ll get a knowledgeable, experienced HR partner for less than the cost of an individual hire—but have a much more effective solution.

Learn everything you need to know about how a PEO works—and how your company will benefit by partnering with one—in this free guide.

Outsourcing Human Resources Functions: Pros & Cons

Pros Cons
A logical, financially sound investment Perceived loss of control over your business
Expansive capabilities Expense
Comprehensive benefits offerings Lack of access and availability to your HR rep
The latest HR technology
Better risk management
HR expertise and experience

Outsourcing HR Functions: The Pros

It’s a good investment.

When comparing outsourcing to hiring your own team member, it’s simply a better financial solution almost every time. You wouldn’t pay someone $100,000 to work on tactical responsibilities when you could hire someone at $50,000 to do the same role. By outsourcing, you gain access to an entire team of people who have both senior/strategic expertise as well as tactical knowledge—all for the same or less cost of hiring just a single person on your own staff.

By outsourcing, you gain access to an entire team of people who have both senior/strategic expertise as well as tactical knowledge—all for the same or less cost of hiring just a single person on your own staff. Click To Tweet

It gives you the functional capabilities of an entire team.

Choosing to outsource to an organization like Genesis means you will have access to experts in all realms of HR. This is difficult, if not impossible, to find in just one person. Genesis has a team of experts who excel in a variety of areas, including:

  • Employer compliance
  • Policy development and management
  • Hiring and onboarding
  • Employee relations
  • Employee benefit administration, and more

You can offer comprehensive benefits.

Comprehensive means there are a variety of products being offered—health, vision, disability, dental, EAP, 401(k)—a holistic list of benefits your company can offer. It also means multiple health plan options, so your employees can find the best fit for themselves and their families.

It is very difficult to access a comprehensive benefits “menu” on your own, as many of these options are available only to larger groups. This is a key reason why so many of our clients choose to outsource their HR and benefits administration to Genesis—we leverage the numbers of all of our clients combined to bring each organization the types of comprehensive benefits their employees want and expect.

Keep in mind that not all outsourcing solutions can do this—ASOs can’t, but PEOs like Genesis HR do!

You have access to HR technology that makes your life easier (and more organized).

One of the pros of outsourcing your HR functions is no longer having to handle, file, and maintain mountains of HR paperwork and documentation on your own. You can take advantage of your partner’s HR technology to simplify employee data management, and allow employee access to information that your outsourcing partner handles.

We maintain personnel records and handle onboarding electronically, so required docs can be signed online vs. in person. And your employees will always have access to everything they need from an employee portal that you don’t have to worry about administering.

Risk management is approached proactively instead of reactively.

Risk management means maintaining a safe work environment as well as safety practices and procedures; it also means protecting the employer from any potential litigation against the employer. As your HR partner, we handle both.

We’ll help you train and onboard your team in ways that can help keep them safe and secure. We’ll also coach you through difficult HR discussions, so that if a termination of employment does occur, you will be better prepared to do the right thing and have the documentation necessary to protect your organization.

You get a breadth of experience and expertise.

The difference between one person’s skills and the capabilities of an entire HR team is vast. With Genesis, you get the vast knowledge and experience of a team who has worked in the HR world for a minimum of ten years—who have seen everything. (Nothing will surprise us!) We’ve successfully navigated challenging workplace issues with our clients before, and we will leverage that experience when we work with you.

But our experience isn’t limited to only difficult situations! Our team will help you implement best practices and keep an eye on trends that can help you improve onboarding and retain high-quality employees.

Outsourcing HR Functions: The Cons

As you read through these “cons” of outsourcing your human resources functions, keep in mind that we’re definitely biased in our answers, because at Genesis HR, we know that these “cons” are actually just misconceptions about what we do.

You’re “giving up control” of your company.

The biggest misconception we hear is from prospects who are worried about us “taking over” their company. The truth is, if you pick the right partner, you’re not giving up control at all! That means that you need to be selective about your choice, finding someone who won’t make you give up your employee handbook policies, for example.

Another common concern: Business owners are concerned about outsourcing their benefits to someone who may not know what their employees really need. In reality, your partner works closely with you to choose the right vendors for your business, and explain the reasons behind their choices—for example, why Blue Cross Blue Shield is the right carrier for your employees’ health insurance. They should teach you about cost control, networks, benefit plan options, overall cost, etc., which should make you feel empowered—and not at all like you are losing control.

An outsourced HR partner “won’t be available or accessible” when you need them.

Some business owners have the perception that if an HR representative isn’t “down the hall” then they’re not available. They worry about how quickly they can get in touch with an outside partner if the need arises.

At Genesis, we really are just a phone call away. Even though we aren’t down the hall, we are very close at hand, ready to provide you with help or answers anytime. In situations when having us onsite is critical, we will be there!

HR outsourcing allows your business to stick to its core competency.

HR outsourcing can increase productivity for your entire team—but only if you choose the right partner. If you’re considering hiring or outsourcing, we’d love to learn more about your needs and provide some insight on how choosing a PEO can help. To get started, fill out this short form to schedule a discovery call.

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