Human resources departments are a valuable part of a company, but is it worth it for small business owners? The answer depends on various criteria like how many employees work for the team and whether there are performance factors at play too. HR is useful for onboarding, engagement, and supporting well-being within an organisation so there are clear benefits. The question is, how necessary it is for the individual circumstance? Should small business owners do their own HR, or should it be outsourced? This post explores the topic below.
The Benefits of HR Services
It is hard to argue with the validity of supportive HR departments. They are useful for everything to do with an employee and the wider organisation. The real debate is in regard to whether to keep these services in-house or outsource them. HR is useful for all the following reasons:
- Organising employees
- Successful onboarding
- Training and development
- Payroll
- Holiday arrangements
- Internal conflict resolution
- Termination
- Legal adherence
- Gaining insight
- Improved productivity
The list goes on and on. There are almost too many to discuss all at once, but when HR works, it really brings great things to the table for every corner of the business.
Why Might You Have In-House HR?
There are a few reasons why keeping things all under the same roof looks like the optimal choice. These are factors like ease of access, a more personalised experience, and an increase in control over your internal operations. While these points are all valid, there are arguably further benefits to extending your HR protocol to an outsourced company.
The Benefits of Outsourcing HR Agendas
Outsourcing is arguably more cost-effective and efficient because it allows you to access a wider range of services. If you are sitting on the fence in either direction, consider the following advantages to inform your decision in the best possible way. Professional and established companies like The HR Dept in Doncaster work with you to create a fully involved approach as to what you want and what you could access in the context of what fits with your company structure. Here are four benefits to think about.
Cost-Effective
Having an internal, dedicated person that controls the HR department within your company walls means that you have another employee to compensate. The HR manager role is a higher paying position, and that would be a further demand on your budget. Whereas, a package from an external company would be a much lower, more accessible cost that would be beneficial for a smaller business budget. It creates flexibility in this sense. It also helps that the outsourced branch would bring cost-saving solutions to the table to increase the efficacy of your operations too.
A Range of Services
With expert models like this, you have access to a higher tier of services. There are things you might not have even considered incorporating into your structure before, for instance, engagement rituals for employees to improve and encourage higher retention rates. Everything has to be put into the context of the bigger picture, and it is all relevant when thinking about the future viability of the company. Some things you could access include innovative training and development agendas, professional termination policies, optimised productivity strategies, and highly efficient payroll interventions. These four things alone will improve your reputation, motivation, and general workday procedures.
More Time for Internal Practices
It also means there will be more space in the day to focus on your area of expertise, as opposed to having to manage other departments as well. As a business leader, it is entirely plausible that your plate is full enough. When you add jobs on top of this, your already stretched agenda becomes even thinner still. This is not ideal, because it means there is less energy and space for the tasks that demand your attention. Through outsourcing, there is an accepted peace of mind that comes as a natural consequence. Why? Because professionalism is all but guaranteed, and this means you don’t have to manage it anywhere near as deeply as you would with the alternate approach.
Optimal Insights
The last point to think about is the advantage to optimising the insights into your employees. External HR teams are better able to take a wide approach to evaluate KPI data and bringing positive, constructive action plans to the table for each and every employee.
So, should small business owners do their own HR? The answer is sometimes yes, but most of the time, no. If this process can be outsourced, the benefits speak as to why it absolutely should be.