Three Signs Your Business Could Benefit from Outsourcing HR 

Every company needs a strong human resources (HR) department to operate effectively. Managing HR responsibilities can quickly become overwhelming, involving audits, compliance tasks, resolving workplace issues, recruiting, and much more. Proper HR management is the key to a successful business, but it can also be complicated and overwhelming.  

Handling HR tasks can be exhausting, especially for managers and business owners with little to no expertise or experience in the subject. The risk of improperly handling HR responsibilities can be stressful, lead to potential fines, and disgruntled employees. This risk is one of the reasons that small to midsize businesses outsource their HR tasks to third-party companies.  

What is HR Outsourcing 

Human resources outsourcing involves delegating some or all HR functions, such as payroll administration, benefits management, recruitment, compliance, and employee relations, to a third-party. Outsourcing enables organizations to streamline operations, reduce administrative workloads, and access specialized expertise without breaking the bank. 

HR outsourcing can take various forms. For example, a business might choose to outsource specific tasks, like background checks or benefits administration, or partner with a full-service provider that manages all HR processes from start to finish. As a result, your team can lighten their workload and prioritize strategic initiatives such as talent development and business growth.  

Signs It’s Time to Outsource HR 

Payroll mistakes 

Payroll is a complicated back-office task that takes time away from focusing on other business objectives and has a greater risk of user error. Many businesses lack the necessary software or processes to automate their payroll, forcing them to manually calculate gross pay, deductions, garnishments, and overtime for each paycheck. And for companies with multiple employees, this can quickly snowball into an array of spreadsheets, leading to a greater risk of miscalculation and incorrect filings.  

If you frequently misfile paychecks or miss deadlines, it may be time to consider outsourcing your HR responsibilities to a third-party administrator. These companies have access to teams of experts who can properly calculate paychecks, ensure proper filing, and streamline the process by implementing automated payroll software. 

More workplace accidents 

Operating an unsafe workplace can have numerous consequences in the short and long-term. Working in a hazardous environment leads to a greater risk of accidents occurring. Accidents like slips, trips, falls, improper equipment use, sprains, and more are preventable with the right safety process and procedures in place. If you find yourself falling behind in inspections, failing audits, and swimming in workers’ compensation claims, it may be time to consider utilizing an outside resource like a professional employer organization (PEO).  

PEOs like Group Management Services (GMS) can help educate your employees on proper safety procedures, help your business develop processes to ensure consistency and safety around the workplace, and conduct safety audits to help you identify potential hazards. Creating a safe work environment greatly improves productivity, employee trust, and your company’s reputation. Investing in safety improves your business efficiency, workplace culture, and saves you time and money, improving your company and its efficiencies in the long run.  

Higher employee turnover 

Managing, recruiting, and retaining employees is an important HR responsibility. Ensuring that employees are happy, feel cared for, and are compensated well often leads to higher retention rates. The happier employees are, the more likely they are to stay at your company. Workplace culture and everyday processes matter a great deal to your retention rates. The better your retention rate, the less you have to spend on recruitment and hiring costs.

If your employee engagement and retention rates are tanking, it could be a sign that you can’t handle it all alone. Implementing retention strategies, interviewing potential employees, and recruiting them is a lot for one person to handle. By outsourcing these tasks, you can save time and money, allowing you to focus more of your focus and funds on business growth.  

PEOs like GMS utilize their recruitment teams to conduct phone interviews, post job listings on top job boards, and review resumes. You still hold the power to hire or fire whoever you want, but the third-party does most of the legwork. 

A Valuable Partnership 

HR responsibilities are crucial for the success and efficiency of any company, but they can become increasingly complex as a business grows. When administrative tasks start consuming valuable time, increasing the risk of errors and workplace challenges, partnering with a PEO can provide a strategic advantage. 

Outsourcing HR functions can provide the expertise and structure necessary to ensure smooth operations. An HR partnership can help organizations reduce risks, improve employee satisfaction, and enable internal teams to focus on long-term strategy and business growth. By identifying potential issues early and utilizing the support of experienced professionals, businesses can enhance their HR practices, protect their workforce, and position themselves for sustainable success.  

GMS can assist your company in building a strong safety program, implementing employee retention strategies, and consulting on operational changes. GMS serves as a partner for your business, guiding your decisions and providing expertise across your HR and back-office responsibilities. If you would like to learn more, click here!