Should your business outsource HR?
Published March 29, 2021
In an increasingly competitive business world, every arm of your company needs to be the strongest possible—and the management of human resources (HR) may be among the most challenging. Hiring and supervising employees is only part of what HR encompasses; there are also the core mechanics of the company, such as payroll and taxes.
At times, meeting these basic obligations can consume a disproportionate amount of your company’s time and resources. So, should you outsource those functions to improve operations? To decide if this is the correct choice for your company, it’s important to know that there are different types of HR outsourcing and understand what differentiates them.
Not all outsourcing is created equal
Software, services, and consulting—these are the words to know when you want to learn about outsourcing your HR. Each represents a different level of commitment and convenience. And each of them is also often best suited to businesses of particular sizes, or those facing certain pressures, such as a short-staffed office.
Software outsourcing allows businesses to streamline and often automate many processes that would otherwise be repetitive and highly time-consuming, such as computing payroll and managing time cards.
And outsourcing HR planning goes one step further. Instead of providing only software, service providers assist you with regulatory and legal compliance—such as with fair hiring or employee licensing. Placing your trust in outside services with expert knowledge can reduce the burden of compliance for you and your staff.
There is one other type of HR outsourcing to consider: “PEOs” or professional employer organizations. What is a PEO? Rather than providing services listed above, PEOs act as the actual employer of your staff, handling all HR-related functions while you pay a fee for each employee. Because this requires a fundamental reorganization for most companies, we won’t be focusing on it here.
Related: The 5 best ways to track employee hours for HR purposes
Determining the Appropriate Level of Outsourcing
One of the prime benefits of outsourcing some HR functions is the breathing room it grants to your team—whether you’re operating a bare-bones startup or a company with many employees and departments.
Even when you opt to maintain some in-house HR staff in addition to outsourcing some HR, it’s easier to keep their efforts focused on matters vital to promoting success and the right company culture, instead of on the ever-present demands posed by tasks such as payroll. For that reason, determining when to outsource HR requires a careful evaluation of your current and future needs.
For small to medium-sized businesses for which HR can be a time-sink, an all-in-one provider of services, consulting, and more can provide the clearest and most tangible benefits. Large businesses can still rely on consulting services for compliance but may benefit from in-house staff for employee interactions. In these cases, software-only solutions can lighten the burden of your HR team.
NCR may be the right fit for you with the tools, knowledge, and experience gained after helped thousands of businesses with their HR needs.
So, if you’re wondering “Should I outsource HR?” Contact us today to learn more.
