Is Your Small Business A Prime Candidate For Outsourced HR?
Does your small business still manage all the HR in-house?
It’s not uncommon for Australian small business owners to look after many of the HR functions like recruitment, orientation, conflict resolution, policies and procedures, payroll, and training themselves – or at least with the help of a trusted assistant.
The mindset among some small business owners is that, while they would never attempt to configure a server themselves (and therefore always outsource IT), HR functions are ‘people issues’ for which they are more than adequately qualified.
Even if this is the case (and it usually isn’t!), the amount of time that HR functions take up prevents many small business owners from taking on the other important tasks involved in running and growing a business.
Deloitte’s 2016 Global Outsourcing Survey reported how outsourced HR is one of the main areas expected to see growth in the coming years, along with IT and Finance.
While that survey was aimed at bigger business, outsourcing HR is no longer the exclusive domain of corporations with billion-dollar turnovers.
Digital delivery of many HR solutions and the availability of a talented pool of HR professionals who have turned their backs on the corporate world mean that outsourcing HR has become practical for small businesses too.
So are you a likely candidate? If the following qualities sound like you or your business, you may want to consider outsourcing:
- You are concerned about meeting employment requirements
Because of changing employment regulations, many small businesses have problems with hiring rules and compliance issues.
HR has become increasingly complex in this respect. A qualified HR professional will not only get to know your business and your industry inside out; they will also be across all of the latest employment regulations and laws – and help you take the steps to meet them.
This reduces your risk of unfair dismissal cases or government fines for bad practice – which can be severe.
- You are spending far too much time on HR functions yourself
HR functions have expanded – yet you only have one pair of hands. It’s not just about hiring, firing and paying staff.
As your company grows from a few employees to greater numbers, so too does the amount of time you must spend on HR.
As mentioned, this may be preventing you from investing your time into the important tasks that are almost impossible to outsource – and which only you may be able to do: growing your network of leads, increasing sales, developing the vision and direction of the company, developing products and services, and so on.
By relieving some of the time-consuming administrative burden of HR, you free your time up to grow your business.
- You frequently have staff problems and conflict
If there is a bad undercurrent of feeling, causing conflict and frequent interruptions to the day-to-day business, you know you have a problem; but how do you fix it and ensure that it doesn’t recur?
This is sometimes the point where business owners hold their hands up and say “I need help” – and will hire a consultant to mediate and solve problems.
You can prevent these problems before they get to critical stage with regular assistance from an experienced HR professional who is trained in employee relations. If they have experience in conflict resolution and mediation, even better.
- You are using outdated HR strategies
Managing HR in-house may mean that you are not fully up-to-date with the strategies or the technology that HR professionals have access to.
Perhaps you are not using the available resources to profile employees before hiring them; you are not using social networks effectively; or you don’t have the most efficient payroll methods.
Nothing stands still – and HR has moved on even from a decade ago. It’s important to keep up-to-date with this, so that you are giving your business the right tools to grow in the right direction.
- You want to reduce overheads
As well as raising the level of expertise, outsourcing HR can lower the costs associated with handling HR in-house.
With an outsourced HR professional, you don’t have to worry about the costs associated with training and development, absenteeism, holidays, sick pay, or superannuation; this is not to mention the rising salaries involved or the office space needed.
You can also streamline many of the processes that were taking up time and money in your business (payroll and benefit administration, for instance).
- You’re spending too much on recruitment
A common sign that a small business needs to outsource HR is when they are spending too much time and/or money on recruitment.
It may mean that the right people are not being brought in to the right positions; it could be that they are leaving too quickly due to other problems at the business.
A high staff turnover is not something that should be accepted as ‘part of doing business’. Outsourcing HR can help you to reduce costs associated with this – and in the process stabilise your staffing situation.
- You’re not nimble enough
Are you in an industry where responding to change is important?
This is more frequent nowadays as change tends to happen quickly – and only those businesses that can move quickly enough (for instance, with hiring more of the right staff) may survive.
By outsourcing HR, you can put strategies in place for reacting and adapting rapidly to change so that you stay flexible and ahead of the curve.
- You want to improve company culture
The ‘culture’ of a company runs deep and is often difficult to change without professional assistance.
If you want to change the way your business is going, a qualified HR professional should be able to help you implement the measures that will bring about the desired cultural change.
It may be that you want to introduce a culture of development so that your employees stay longer with you; or perhaps you’d like your people to develop more emotional intelligence; or you want to align your people better to the company vision.
Such changes can have profound effects on a business – or they can fall very flat. Hiring a professional gives you the best chance of a positive outcome with culture change. This often leads to a corresponding upswing in performance.
Ultimately, your time is too valuable as the business owner to be spent on the solutions to the above problems. Well-qualified HR professionals with a wealth of experience are available to help with your most pressing HR problems and to aid the growth of your small business.
If you need assistance with this right now, feel free to email me here: firstname.lastname@example.org.