Topic Outsourcing HR / PEO,

5 Signs You Should Invest in HR Outsourcing

5 Signs You Should Invest in HR Outsourcing

As your company grows, your needs change. These shifting structural dynamics bring hard decisions to make – such as whether to add employees, departments, or partners. One of those decisions is whether to outsource HR tasks or invest more deeply in your HR department.

Here are five clues that indicate outsourcing HR could be a highly beneficial move for your company.

1. Your HR Tasks Routinely Detract from Key Revenue-Generating Tasks

The more employees you have, the more work your HR department is responsible for. Every day, your HR employees tackle a considerable number of tasks that will only continue to grow, including:

  • Answering complex questions on benefits administration
  • Working with insurance carriers to respond to requests and resolve issues
  • Reporting that requires moving data between programs such as Excel and Quickbooks
  • Managing your payroll

Your HR employees should be able to focus on building company culture and helping you advance your business goals – not on time-consuming administration. An HR outsourcing partner can relieve those administrative burdens and allow your employees to enhance your business success.

2. Recruiting and Retaining Employees is a Constant Challenge

Recruitment and retention are paramount for businesses as they impact organizational success and growth. Effective recruitment processes ensure a company attracts and selects candidates with the right skills and cultural fit, which is essential for maintaining a competitive edge. Meanwhile, adept retention strategies are crucial for preserving invaluable institutional knowledge, fostering employee morale, and minimizing the significant costs associated with high turnover rates.

HR outsourcing can play a vital role in enhancing both these areas. By leveraging external expertise, businesses gain access to advanced recruitment tools and broader talent pools, improving the quality and efficiency of the hiring process. Additionally, HR outsourcing firms often bring innovative employee engagement and satisfaction strategies and comprehensive benefits and compensation management solutions crucial for retaining top talent.

3. HR Struggles to Maintain Compliance

HR compliance is no small task. There are a variety of governing bodies that dictate how your business operates to create a fair and safe workplace. Failing to comply with these laws can lead to penalties and unexpected financial burdens. For example, failure to uphold the Fair Labor Standards Act, which governs minimum wage, overtime pay, family and medical leave, and more, can result in a payout of hundreds of thousands of dollars in back wages.

Meanwhile, the Occupational Safety and Health Administration (OSHA) enforces standards for preventing injury and illness in the workplace, and the Equal Employment Opportunity Act ensures that you use fair and non-discriminatory hiring practices to recognize and deal with workplace harassment. There are also a variety of state and local laws you must abide by. Many businesses find the overlapping patchwork of regulations intimidating and even overwhelming – especially when regulations change so frequently.

Regulations have become so complex that it's not surprising how much businesses struggle with them. However, ignorance is not a legal defense. Rectifying violations is time-consuming, expensive, and hard on your business and employees, so you must ensure you follow all regulations. Outsourcing to an HR partner connects you with the regulatory compliance experts they have on staff.

4. Payroll is Time-Consuming and Costly

Payroll is time-consuming with enormous potential for error, and the cost of that time plus the technology costs (i.e., software, online pay stubs, pay cards, and more) can add up. The time involved in correcting errors adds up, too.

Furthermore, your payroll cost per employee is likely more considerable than expected. Most calculations for the cost of doing payroll in-house ignore the cost of collecting and consolidating the relevant information.

Your HR outsourcing partner can provide payroll expertise and HR software that consolidates your technology. This integration saves time, which translates into a lower average cost per employee check.

5. You're Offering Less-Than-Competitive Health Benefits

Health insurance is essential, as it can be a critical factor that outweighs other parts of an offer – and can even help sway candidates when you struggle to compete on cost. Healthcare demonstrates how companies care about their staff and reduce turnover – and for 73% of employees, health insurance is the biggest factor when choosing to stay in their current role.

For many small businesses, negotiating with medical insurance companies alone makes offering a competitive health benefits package difficult. However, an HR outsourcing partner has more leverage to gain access to better benefits with more affordable healthcare plans that they can provide for you. Their partnership reduces the time and effort required of your team while lowering costs without sacrificing quality.

Forge a Stable, Sustainable Business with HR Outsourcing

Ultimately, deciding whether to outsource HR tasks depends less on the company's size and more on what your company can do. Hiring an HR partner means your employees face less administrative burden and can spend more time on the duties that generate income for your company.

Questco has the expertise to help guide your business and provide better benefits so you can focus on your team and help support them.

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