Why you need to outsource HR – Part 1

HR outsourcing is when a business gives some or all HR functional tasks or HR processes to a third-party organisation. 

Outsourcing to a competent HR consultant offers many benefits for both small and large businesses. Expert HR consultants can increase business efficiency by aligning human resources with business goals and ensure legal compliancy. Above all they create an environment where its people, can and are willing to work efficiently and effectively.

You can choose to outsource HR fully or partially. Some businesses fully outsource HR instead of maintaining an in-house department.

However, you may consider partially outsourcing HR to overseas human resources administration, immigration compliance, employee recruitment, or preparing payroll. The outsourced HR provision whether fully or partially engages is an extension of the business’s existing team.

In this two-part blog, we consider outsourcing HR either partially or fully and what the benefits are for your business. 

Why do you need to outsource HR either fully or partially?

Small business owners, who do not require an HR department, may benefit from fully outsourcing all of their HR functions. This can be achieved through a retained HR service. This ongoing level of service provides unlimited support and access to advice whenever they need it.

Businesses with HR departments may need additional expert HR support and advice.

An HR consultant will support a business with a whole range of human resource functions. These include; HR administrative tasks, payroll, pensions, recruitment and training and development.

They manage employee relations issues such as discrimination claims, dismissal, grievances and redundancy. They can also provide HR legal advice and keep clients up-to-date with any legislative changes and relevant, topical issues. Businesses most often outsource pensions, payroll and legal services.

Consultants can also provide strategic HR so that people strategy and business strategy are aligned now and in the long-term. An HR consultant will work with the leadership team to understand their goals and company culture.

An HR Consultant will support the leadership team by planning HR activities that achieve the business goals and vision. An HR Consultant is responsible for ensuring all procedures and policies are compliant. Employees are happy and motivated and they have the skills to drive the business forward. They are also responsible for supporting any growth initiatives through strategically aligned planning.

What are the benefits of fully or partially resourcing HR?

Well-managed HR has a huge, positive impact on your business. Here we look at some of the benefits of fully or partially outsourcing HR.


Mitigates risk to business

If a business fails to comply with employment law, they could face an employment tribunal and costly legal expenses. Poor people management and being unaware of changes in the law can come at a heavy price including damage to reputation. 

Employment law often changes. An HR consultant will ensure that policies, procedures and employee contracts are updated so you remain legally compliant. Lack of expert HR knowledge can lead to employment legislation. This can lead to tribunal claims such as unfair dismissal, constructive dismissal, discrimination claims and more.

Employers have had to review their existing policies and procedures to reflect the imposed changes due to the pandemic. For example; working from home, juggling family commitments, sickness and bereavement. Working from home has implications for data protection law, risk assessments and reporting absences, engagement and motivation.

 More efficient use of time

In small businesses, owners and managers often handle HR themselves. Outsourcing HR functions either fully or partially frees them to focus on their specialist role which increases business efficiency and profits. 

Outsourcing to an HR consultant means you have expert advice quickly. They can provide the answers to questions that could take a manager valuable, expensive time to research and solve.

Your HR consultant will advise you on all aspects of HR. Including dismissal and grievance, employment contracts, performance management, maternity rights, redundancy leave and sick leave. They will also keep you abreast of legislative changes.

The cost of management time to deal with HR issues such as handling difficulties with an employee can be wholly disproportionate.

Saves money  

Hiring a full-time in-house HR expert is expensive. Outsourced HR is expert advice and support at a fraction of the cost.

You will save money by outsourcing HR through a monthly retained HR service rather than employing a full time HR manager. Your business will benefit from comprehensive, specialist HR support for a fraction of the cost. Alternatively, if you partially outsource then you only pay for the specific functions your business needs.

People are one of the most expensive business overheads. HR consultants increase a business’s bottom line. By ensuring human capital is driving the business forward by working at a high level of efficiency and productivity. Sometimes HR consultants make recommendations for restructuring departments and leadership teams to achieve business goals. 

What can HR Ready do to support your business?

HR Ready offers flexible solutions throughout outsourcing services which are tailored to your business and budget through our retained and pay-as-you-go HR services. 

Whether you are considering outsourcing HR partially or fully, our expert consultants will be an invaluable extension to your business and support to your business processes. We are dedicated to increasing business efficiency through strategic HR Solutions and management that aligns with your goals to drive business success. 

To talk to our HR professionals about your business outsourcing arrangements and HR requirements call us on: 01223 641017

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