The greatest asset of any organization is their people, but the job of managing our human resources is often forgotten and not a priority. This may be due to cost, lack of resources and/or lack of knowledge. Outsourcing, under the right circumstances, can often be an effective and cost efficient solution in such circumstances. For companies where the cost of bringing Human Resources in-house is prohibitive, outsourcing offers an alternative allowing companies to have quality HR services without the expense. Due to cost, often times companies don’t have any HR presence. Operating without a quality Human Resources function exposes a company to risks with respect to employment law compliance and without any real HR strategy, can hinder the company’s growth. Additionally outsourcing also allows companies to gain access to experts in the field of recruiting, coaching, training, compensation, compliance, employee relations and HR strategy. These experts might otherwise not be available if the company was relying solely on their in-house department.
Take the case study of NOHR, Incorporated. NOHR has been in business for 10 years and now employs 55 people in MA with a satellite office in CA with 6 employees. For years, the CFO has been overseeing his assistant who is responsible for what might be labeled as the HR functions (benefits and payroll). Performance Reviews are never done because there is no one championing the process, there is no employee handbook, no recruiting or onboarding process, compensation isn’t equalized through out the organization and when employee issues arise, the Manager takes action without guidance. For years NOHR has struggled with whether they need an HR presence, but due to a lack of money and a real understanding of the impact of HR, they haven’t acted. After a string of bad situations with terminating employees, they have hired an outsourced HR Manager. In a short period of a time, the outsourced resource has been able to look over all the compliance issues and take care of a number of risk areas. The outsourced HR Manager has also put together an Employee Handbook which eliminates many gray areas and answers questions for employees, such as PTO and workplace policies. Additionally because NOHR decided to go with an outsourced solution instead of an in-house HR person, they also received the advantage of an expert in the area of compensation and another in recruiting. These additional resources have been hard at work setting up procedures in their areas of specialty and have already added great value to the organization. Outsourcing allowed NOHR to get all this for approximately 60% of the cost of if they had hired their own HR Director.
Outsourcing the HR function gives management the time and opportunity to focus on the business while the consultant concentrates on Human Resources. With an outsourced solution this is achieved at a lower cost, with experts in the field and with efficiency and quality. Tell us your experience with using an outsourced HR solution.
