Signs it’s time to outsource HR

Deciding whether to outsource HR can sometimes be unnerving for enterprises of any size because of the perceived additional costs involved and loss of control.

However, choosing to outsource to a specialist in HR provides firms with a wide array of advantages. These include an improved overview, greater control and substantial cost savings brought by enhancing HR processes and reducing fixed-cost overheads. In the following passages, we take an in-depth look at some strong indicators that it’s the right time for a firm to outsource HR.

Overburdened internal teams

When enterprises experience rapid growth, it can sometimes become difficult to hire and train an adequate HR staff that can cope with the demands of an expanding workforce. This can quickly lead to internal teams charged with administering HR processes becoming overloaded. Staff become stretched too thin, taking on more responsibilities than they can manage and issues start to arise. Productivity slows as processes take longer to perform, and backlogs develop. An increasing number of errors creep in, putting companies at risk. Outsourcing HR instead of overburdening internal teams frees up time that lets staff focus on strategic initiatives and core competencies.

Insufficient expertise and technology

When companies recognise a shortfall in specialised HR knowledge, outsourcing is often the answer. Constant errors and oversights in basic HR functions like payroll, recruitment and benefits administration are signs that an in-house HR team lacks the experience and skill to perform effectively. Outsourcing HR services offers companies access to a wider and more specialist HR knowledgebase with multiple professionals who are skilled in specific areas.

As well as harnessing the power of a professional HR skillset, outsourcing also lets companies access the latest technology designed to support HR processes. As a result, firms can simplify and streamline the way they handle HR, automating tasks to reduce errors and improve efficiency and productivity.

Facing compliance issues

Keeping compliant with work regulations is critical for businesses. Firms that are not acting in accordance with HR legislation are at significant risk of legal issues, negative work environments, damaged reputations, penalties and fines, but outsourcing HR can help.

Work laws are exceptionally complex and change over time, making it a time-consuming process for firms to stay informed. Outsourcing HR can provide them with access to experts with up-to-date knowledge on the latest compliance rules effectively minimising risks of potential liabilities.

Hiring, onboarding and retention problems

Several staffing issues raise red lights that HR services need outsourcing. When the quality and suitability of staff being hired starts to drop, it’s often an indication that HR teams are unable to attract the right type of candidates and judge whether they are appropriate for roles. However, when capable staff are employed but struggle to understand the enterprise, its aims and their place within it and fail to become engaged and productive, the issue often lies in a poor onboarding process.

High turnover of quality employees can be another sign that HR administration isn’t operating effectively. Several factors can contribute to this problem, including a toxic work environment, insufficient compensation and a shortage of opportunities for professional growth. Outsourced HR services allows companies access to HR specialists that can implement key strategies like enhancing company culture, providing attractive benefits and pay structures, improving company culture, promoting more open communication and investing in staff development.

Reduced cost efficiency

Companies struggling with the ever-increasing cost of managing an in-house HR team and its functions will find outsourcing can offer significant relief. Not only offering access to a more specialised knowledgebase, but outsourced HR is also largely considered a more cost-effective option. Outsourcing can potentially cut costs that are associated with the hiring, induction, training, and retention of an internal HR staff.

Is your company ready to outsource its HR?

With cutting-edge HR know-how, at FiveRivers Consulting, we offer professional advice and leading industry insights that can maximise your companies’ current HR services. Our actionable plans are designed to help firms reap the tangible benefits that HR transformation brings. If you have experienced any or all the indicators listed above and are ready to take advantage of the support we offer, contact us today to find out more about how we can help.