Business growth comes with various issues, including the need for better employee benefits, company culture improvements, and new talent. As demands continue to grow, small HR departments struggle to keep up. That’s where outsourcing comes in.
Delegating HR functions to a reliable partner doesn’t just save time. HR outsourcing can help your business grow and save money in the process. Let’s take a closer look at how it works.
What HR Services Can Be Outsourced?
As your company grows, you can outsource a wide variety of services including:
Payroll processing - calculating wages, withholding deductions, filing payroll taxes.
Employee benefits - medical plans, dental insurance plans, Employee Assistance Program, 401K programs.
Benefits administration – designing, managing, and updating employee benefits programs.
Risk management – identifying, monitoring, and addressing employee-related risks to the business.
Regulatory compliance – staying up to date with all HR-related laws and regulations.
Workers’ compensation claim management – designing injury reporting plan, reporting claims, accident investigation, proper employee communications, return to work programs.
However, only comprehensive HR outsourcing leads to savings on employee benefits.
How Can Outsourced HR Help Grow Your Business?
When you are handling a growing business, delegation can play a significant supporting role. Here are just a few benefits of outsourcing HR during this critical time for your company:
1. Focus on Core Priorities
Growing HR requirements demand more and more time. While a startup’s payroll calculation process may not look time-consuming, increasing the number of employees adds complexity.
While your small HR team is struggling to handle the growing volume of work, they can’t focus on top priorities. This leads to poor hiring decisions, payroll mistakes, and costly tax errors.
Instead of handling time-consuming, repetitive tasks, your HR experts should be solving hiring, onboarding, and retention issues to turn your company into an employer of choice. Outsourcing helps your business grow by aligning HR capabilities with organizational needs and goals.
2. HR Compliance
As your company grows, specific compliance requirements change. Many business owners are too busy to study the changing legislation that applies to their new size. This can lead to significant penalties that may hinder your growth process.
For example, the Affordable Care Act imposes certain requirements on companies with more than 50 full-time employees.
By outsourcing HR compliance to a reliable HR partner, you can stay up to date with the latest changes in local, state, and federal laws that apply to your company’s growing size and needs.
3. Free Up Cash Flow
When you are handling growing business needs, each cost-saving opportunity plays a significant role. By outsourcing HR duties to a reliable partner, you can save money by:
Eliminating the need to hire new HR staff. Employee hiring, onboarding, and retention tactics are time-consuming and costly. By working with an HR partner, you get the same services at a fraction of the expenses you face when hiring new team members.
Gaining access to better benefits. To attract top talent to your growing business, you need to rethink your benefits offer. The costs of better benefits can be too high for a growing company. By working with an HR partner, you can gain access to better benefits through economies of scale.
Cutting workers’ comp insurance costs– depending on your state, a partnership with an HR service provider can help you cut workers’ comp costs. At the same time, your HR partner will pay an upfront deposit, so you can keep the cash and pay as you go.
Freeing up cash flow contributes to numerous business growth opportunities, including making new hires, buying new equipment, leasing a bigger office, and expanding marketing efforts.
4. Reduced Legal Risks
A smooth growing process involves proper risk management. As your company expands and the number of employees grows, so do the risks. To mitigate these risks, it’s important to evaluate existing HR practices and implement best practices.
Failing to follow best practices may result in lawsuits, IRS fines, employee churn, and injuries in the workplace.
A comprehensive HR outsourcing partner will audit your HR practices to ensure they are top-notch.
5. Integrated HR Technology
When a company grows, so does its need for software solutions. Since software investments tend to be expensive, many HR teams are stuck trying to work with non-scalable programs. This leads to lost time and costly errors.
A comprehensive HR outsourcing partner can provide best-in-class HR software that handles payroll processing, time & attendance, benefits enrollment, managerial reporting, and employee self-service portals.
Instead of dealing with a different vendor for benefits enrollment, payroll, and time & attendance, you only need to communicate with your HR outsourcing partner. At the same time, best-in-class technology reduces the need for manual re-entry of data which saves time.
Business Growth through HR Outsourcing
If your business is growing, your HR needs to grow with it. Keeping up with the new requirements, compliance issues, technology demands, and financial strain can be challenging.
By outsourcing HR functions to a reliable partner, you can find time to focus on core priorities, cut hiring costs, take advantage of 5-star HR tech, and stay compliant with the changing legislation.
By choosing the right partner, you can explore growth opportunities worrying about the rising complexity of HR functions.