Should my company outsource its HR functions?
Is it worth it to pay a company to do payroll, benefits, and other HR tasks for us?
Can’t we just manage HR tasks with the staff we already have—or hire someone to do them internally?
Do any of these questions sound familiar? They might if you’re a growing small to midsize company that’s realizing you don’t have the capacity you once did to handle your HR needs.
To answer your questions—yes, you should consider outsourcing! Simply put, outsourcing your HR to the right partner is the best way to help your business continue to grow while maintaining compliance, keeping your employees happy, and controlling your costs. If you’re considering scaling your efforts, building your team, and growing your bottom line, you need to consider HR outsourcing. Here’s why.
Why do companies outsource HR? 8 Compelling Reasons
1. To gain expertise they don’t have in-house—and won’t get in a single hire.
As a small or midsize business, you will soon realize (if you haven’t yet) that you simply can’t get all the HR expertise your business needs from just one person. No single person has the bandwidth to know everything you need to know about all HR- and compliance-related tasks!
In comparison, outsourcing to the right partner will equip you with a team of experts all focused on their individual fields of expertise, including compliance, technology, HR, payroll, benefits, and more.
Practically, it’s unrealistic to think that a company of 30 people could afford to hire multiple HR professionals for each of these tasks—businesses can’t put multiple people into a single function that isn’t revenue generating; that investment doesn’t make sense!
But you can outsource all HR functions for the cost of less than one single hire. That’s what Boston-based MOCA Systems did—check out this video to see why getting a team of experts for their small business topped their reasons for HR outsourcing.
2. For access to cost-effective, comprehensive benefits.
Being able to provide comprehensive benefits is a differentiator when it comes to hiring the best talent. If you want to be competitive in the marketplace, the benefits you offer make a difference. For many small and midsize businesses, procuring affordable, comprehensive options can be a challenge; owners are left trying to DIY their benefits (at a higher cost) and passing along the expense to their employees. This affects both hiring and retention.
This is why outsourcing HR can be transformational to your business. Specifically, when companies outsource to professional employer organizations (PEOs) like GenesisHR, they are able to hand over this headache to a partner who specializes in it. In addition to helping find and select benefits, a good partner will also help you manage them, saving your team time and money. (After salaries, benefits are the second-largest cost center for employees!)
At GenesisHR, we give small businesses and nonprofits like yours access to a portfolio of benefits you could not get on your own—Fortune 500 benefits, health insurance with Blue Cross Blue Shield of Massachusetts, and more. This evens the playing field and allows you to attract better talent. Read more about the benefits packages and insurance offerings you could get if you partner with Genesis.
3. To help them grow faster.
Growing a business requires good hiring practices—you need a plan to recruit people, onboard them, train them, and manage their performance over time. For many small businesses, some (or all) of these functions can only be accomplished with the assistance of an experienced HR partner.
4. Because they’re becoming a multi-state or multi-site employer.
Companies that are expanding outside state or national borders—as well as those that are opening multiple locations—are subject to multiple (often complicated) state and local laws. Navigating and complying with these laws is very difficult without expert guidance. To do this on your own, businesses have to:
- Understand employer requirements in every state in which you do business
- Follow the laws applicable to business in those states
- Find hiring, onboarding, and training best practices for each of the states and sites they have businesses in
This research alone is time consuming and can be difficult to parse. Now, add in the growing remote work population, and even the basics—communicating with team members and engaging remote employees—are more complicated.
The team at GenesisHR has done all this before. We have the people, systems, and processes in place to help you grow your business and stay within the regulations that govern your company, no matter where you’re located.
5. To stay compliant.
You don’t know what you don’t know when it comes to compliance. Federal, state, and local regulations abound and are constantly evolving. Unfortunately, most employers don’t have the time or the manpower to keep up with the ever-changing landscape—but they’re still responsible for adhering to it!
Most employers would say it’s worth every penny to have a team of dedicated, knowledgeable experts to watch the landscape, predicting what is to come in terms of legislation, and help you stay in compliance. Especially for growing companies, compliance requirements can be confusing; expansion affects requirements for things like FMLA and ACA reporting, which carry fines and penalties if they’re not done correctly.
6. To improve employee relations.
Haven’t had to deal with difficult employee matters yet? It’s not a matter of if but when they will arise. —and when they do, your company needs a plan for handling them. This is one of the less-considered reasons for HR outsourcing because most organizations don’t need a full-time, on staff resource to navigate these matters. (You shouldn’t be encountering them that often!) But when they do come up, you need the expertise of someone who has handled similar situations before.
From performance management issues to unauthorized chronic absences and more, employee relations matters are complicated. Employers want to do the right thing for their employees while still mitigating their risk. At GenesisHR, this is an important facet of how we serve our PEO clients. Additionally, we also help you build a skilled and reliable workforce by helping you train your employees, establish official employee handbooks, and beyond, so you can (hopefully) limit the number of difficult employee matters you face.
7. To access better HR technology
The difference between outsourcing HR technology and trying to manage tech yourself comes down to organization, redundancy, and savings.
If you’re trying to DIY HR technology, you’ll almost certainly end up with disparate systems and duplicative programs in an attempt to manage documents, personnel files, resumes, onboarding and training information, PTO requests and approvals, timekeeping, payroll data, etc.
Outsourcing your HR to a company with a proven technology platform makes it simple to keep all your processes, systems, and data tidy and organized in one secure, easy-to-access location. At GenesisHR, we have the PEO payroll service tools you need to simplify and expedite your payroll (and make sure it’s accurate), including self-service report retrieval, custom reporting, and super-easy payroll submission and approval.
8. To manage all your insurance partners and insurance administration.
Consider this: You offer your employees medical, dental, and life insurance (at minimum). That’s three different companies sending you a bill each month; then, someone has to reconcile the numbers, collect from the participating employees, and follow-up. That sort of back office administration takes up time that could be better spent elsewhere. On top of that, if a member of your accounting team is taking care of this, they may simply review and pay bills. They won’t be checking for missed payroll deductions, or billing mistakes, which could mean you end up overpaying (a mistake that’s difficult to correct).
When you outsource HR, you don’t have to worry about the details that are easy to miss—someone else is reconciling and paying on your behalf. This gives your staff time to focus on the activities that grow your business, not the tasks that eat up most of their days.
Do one—or all—of these reasons strike a chord with you?
GenesisHR clients were all motivated to seek out our help due to one or more of the eight reasons listed above—you can read and watch testimonials from some of them here. If any of these reasons resonate with you, it’s probably time to start the process of finding a partner you can trust to outsource your HR to. We’d love to be on your list!
You can get in touch with us here. We’ll discuss your business and your unique HR needs, and help you determine the right fit for your company (even if it’s not us!).