7 Benefits of Outsourcing HR Services

When it comes time to build a new website or scout real estate for a new office, most small businesses
don’t hesitate to call in a contracted professional. Outsourcing your Human Resources (HR) functions
should be considered in the same way: let an expert handle this important aspect of your business while you focus on your core business functions, that is the activities that earn revenue.

Today’s HR administrative function goes beyond basic payroll and benefits administration. It is highly
complex and does not contribute to business profitability. In fact, much of HR administration only impacts the business if it is done wrong.

Building an effective and knowledgeable in-house HR department isn’t always feasible. That’s where a
professional employer organization (PEO) can step in to help. Smart companies outsource their back-of-the-house HR administration to a PEO, resulting in an ability to focus on running the business and maximizing profitability. The advantages of HR outsourcing are many. Take a look at some of the top benefits of outsourcing HR services below.

HR Outsourcing Services: A Strategic Advantage for Growing Businesses

Partnering with a professional PEO to manage some or all your HR needs can be a game-changer for small businesses, allowing them to access the expertise and resources they need to compete with larger
companies, all while saving time and money.

1. The Efficiency Advantage

One of the most significant benefits of outsourced HR solutions is the efficiency it brings to your
organization. Outsourcing HR services frees up your internal staff from the burden of repetitive tasks like payroll processing, benefits administration, and basic employee recordkeeping. Imagine what your team could do when they have the time to focus on the strategic side of HR. Whether that’s developing a robust, retention program or creating a process for managers to actively promote professional development, having the time to think big and broad is the path to next-level growth.

2. Access to Improved HR Technology

Leading HR outsourcing providers utilize advanced Human Resource Information Systems (HRIS). These systems automate many HR processes, improve data management, and provide valuable insights for better decision-making. You gain access to these sophisticated tools without the hefty upfront cost of purchasing and maintaining them yourself. This frees up your technology budget for the platforms and systems that support your core business.

3. Enhanced Employee Onboarding and Offboarding

A smooth onboarding experience is essential for setting new hires up for success. Undisciplined onboarding can lead to talent walking out the door in less time than it took to recruit them. Outsourcing HR can ensure a standardized and efficient onboarding process, including the latest paperless/online forms completion, background checks, paperwork completion, and company orientation. Paperless online onboarding ensures all employee paperwork is accounted for in electronic files and avoids the need to follow up and hunt down missing and incomplete documents. Properly completed I9s, handbook acknowledgments, W4 withholding, direct deposit agreements, special notifications, etc., are accounted for and ready for inspection by interested agencies. With all the important boxes checked, your team has the bandwidth to focus on training and making your new hire feel welcome.

Equally important is a streamlined involuntary separation from employment. Outsourced HR experts can
handle this sensitive task with clarity and compliance, minimizing potential legal issues and ensuring a
smooth separation. Managing a parting of the ways through an outsourced third party can be less stressful and emotional for both the leaders and employees.

4. Cost-Savings Through Outsourcing

The financial benefits of outsourcing HR are substantial and proven. Outsourcing eliminates the need for
additional in-house HR staff, including salaries, benefits, and office space. As the employment landscape
and laws shift, in-house HR staff need to stay up-to-date with training, conferences and certifications that all add expenses to your bottom line. Additionally, you avoid the expense of purchasing and maintaining HR software by working with a partner that has their own HRIS.

5. Improved Risk Management

Nearly every state in the nation, as well as local governing bodies, are legislating increasingly complicated HR-related laws that put every company at risk for non-compliance. Burgeoning employment law at the federal level is also growing in scope through not only the typical sources but through new sources such as the National Labor Relations Board, the Department of Labor, the Federal Trade Commission and more. Outsourcing to experienced professionals minimizes the risk of costly legal issues arising from non-compliance with employment laws and regulations. Effective HR practices can ensure your company is compliant and help prevent costly lawsuits.

6. Gaining an HR Expertise Edge

A significant advantage of outsourcing HR is the access to a wider range of expertise than a small in-house team can offer. HR outsourcing providers employ a team of specialists in various HR domains, such as payroll, benefits, and employee relations. This allows you to tap into a wealth of knowledge and experience that may not be readily available within your growing company. HR regulations and best practices are constantly evolving. A qualified HR outsourcing partner stays current on these complexities, ensuring your company remains compliant and operates in accordance with the latest HR standards.

7. Consolidation of Vendors

One often overlooked benefit of outsourcing HR is the tremendous advantage of consolidation of vendors into one that controls and coordinates a multitude of services. Rather than dealing with contracts, issues, and resolutions with many vendors, you can work with a single vendor for payroll, tax filing, HRIS systems, performance management products, learning management systems, applicant tracking, benefit plan vendors (medical, dental, vision, life, STD, LTD), benefit plan administration, human resource management, workers’ compensation, unemployment compensation, training and much more. Some companies eliminate up to 20 total vendors in favor of one through a PEO. The advantages are great, including 20 fewer meetings, contracts, vendor relationships, renewals, and discussions. The PEO, as a single vendor, has systems that all “talk” to each other and increase the efficiency of reporting, system access, and all aspects of HR management.

Outsourced HR services for small businesses can empower you to achieve significant gains in efficiency,
cost savings, and access to specialized HR expertise. This allows you to focus on the strategic planning and initiatives that drive business growth while ensuring a compliant and positive work environment for the people who come to work every day to support your vision.

Ready to take the next step towards a more efficient and strategic HR approach? Get a free quote today.

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