When is it time to outsource HR?

By Brenda LaMarche | Guest Column

Human resources represents a wide variety of tasks ranging from payroll and taxes to benefits administration to legal compliance. Because of that, many small businesses are looking to outsource HR to experienced companies who can provide the expertise needed to handle these vastly different tasks.

A qualified, experienced HR company can provide expertise on all fronts, easing your mind and ensuring that your company stays in compliance with employment laws and payroll taxes. But when is it the right time to find more help for your HR operations? Here are several situations that can indicate it’s right now:

When the person who handles all of your HR wears too many hats. Chances are this person is better at some parts of the job than others. They may miss important deadlines due to a lack of knowledge or time. Sometimes, that person focuses on the part of their job they like more and ignores others, which can become problematic. The multiple-hat wearer can become burned out as well as frustrated with being overworked, which may cause turnover in a key position.

Working with an outside HR firm makes a lot of sense for small businesses when there is a single person responsible for too many aspects of the everyday business. When do you start considering outside HR help in this scenario? A good rule of thumb is when that individual is spending 25 percent or more of their workday on HR-related duties.

By allowing you to focus on operations, the HR company you choose can become a valued partner in the success of your business. With experts in multiple areas of the field, they may find new ways to save money on benefits or other employee services. Perhaps they can lift the stress of time-sensitive, critical tasks from your administrative to-do list. In some ways, it can be easier to find an experienced, qualified HR firm than it is to find a comparable employee to do that work – and you won’t have the costs associated with adding an employee.

When your company is poised for additional growth. When you scale up, the need for consistent policies grows, too. An HR firm can keep you on track by assisting with company policy development, training management and finding holes in your employee handbook; it can also take over employee onboarding, payroll and benefits, helping to attract and retain employees.

If your company struggles to keep up with compliance issues related to HR. How are you approaching risk management? If this is a concern for your company, outside experts can often provide a way to minimize your liability, relieving you from research into how changing regulations apply to your business. Compliance should be a priority for businesses of all sizes. The expertise of an HR firm could save your company money by avoiding fines, penalties and legal fees.

In summary, outsourcing your HR operations to a qualified firm can be a cost-effective way to minimize liability and ease stress. The first step for most small businesses is to review how outsourcing options could help streamline HR needs at the company. Make sure the firms you interview have the expertise your company requires, and vet them thoroughly to ensure they are a good fit for your company. •

Brenda LaMarche is president of BRL HR Consulting, a human resources, consulting and outsourcing firm based in North Liberty, Iowa.