Outsourcing HR can feel like a gamble. In trusting a third party with your employees’ wellbeing, motivation and so much else, you might feel somewhat powerless. With Brexit on the horizon, you may also feel uncertain about outsourcing beyond the UK.
These worries are understandable, but they are not strictly logical. After all, outsourcing is not just one thing, and neither is HR. Rather, they are both practices that involve many different things. So, while there might be many reasons not to outsource your HR, there’s no one reason.
As an employment and HR lawyer in Jersey, I’ve advised countless businesses on the legal and practical implications of changing their HR strategies. As such, I know how complicated outsourcing your HR can be. However, I also know how beneficial it can be.
So, should you outsource your HR? Here are five reasons why it could work for your business.
1. People like people people
Human resources people specialise in being great with other people; it’s what they do. As such, any fears you might have that outsourcing your human resources will mean that your employees don’t gel with human resources will be unfounded — providing you pick a good human resources team to outsource to.
A good human resources team will be able to work with any company. So, no matter what your business, there’s a team out there.
2. Leave it to the experts
If you’ve started a business, it’s because you’re passionate about something. Whether that’s running city tours, operating a restaurant, or fixing motorcycles, there’s something that excited you enough to turn it into a profit-making enterprise.
Very few people, however, get into business because they love dealing with employee contracts, or because they love dealing with employment law, or because they love handling payroll. It’s for this reason that HR outsourcing is so popular. The idea is that you hand this stuff over to the experts, so you can carry out being an expert at the parts of your business that you really enjoy.
3. Knowing but not wanting to know
A truth that every business owner knows is that HR is necessary. However, it’s not a truth that many business owners are happy about. After all, HR doesn’t generate income — at least not directly.
HR helps the legal side of your business run smoothly, and it can also help to make your employees more motivated and happier. In turn, these things will make your business more profitable, but it’s hard to figure out the exact return on investment.
Outsourcing HR, however, makes the ROI from HR much easier to calculate. By paying for someone to do the things that you had, until recently, been doing yourself, you can weigh the cost of outsourcing HR against the opportunity cost of doing it yourself.
Once again, what outsourcing HR does is give business owners more time — the one commodity that every business owner needs more of.
4. Size doesn’t matter
A common misconception is that outsourcing HR only benefits businesses of a certain size, but that’s not necessarily the case. Even if your business is just three people, paying for a third party to deal with contracts or to help with the search for new talent is not unusual. Outsourcing HR is like outsourcing anything; it’s a recognition that your time would be better spent doing something else.
5. Testing the water (or the employee…)
Outsourcing HR is a compromise. On the one hand, there is doing all of the HR work yourself. On the other hand, there is hiring a full-time employee to do HR work within your company. Outsourcing is often a good happy medium. If the experiment doesn’t work out, you can return to doing the HR yourself. If it does work out, why not consider hiring this person full-time?
6. Remote is close
The rise of remote working is changing business in a myriad of ways, but the possibilities with regards to HR outsourcing are particularly exciting. While not every HR service can be utilised remotely for every company, most work relating to documents can be. Once you substitute paper and filing systems for Google Docs and Google Drive, the scale of the potential for remote HR outsourcing becomes clear.
Chris Austin is the Head of Employment Law at Parslows Jersey. Chris specialises in giving advice on the resolution of contentious issues and claims.