HR Outsourcing Companies for Small Business

The Milestone Team September 21, 2021
HR Outsourcing Companies for Small Business

Why do companies outsource HR? Most small businesses have limited resources and may be overwhelmed or ill-equipped to handle core human resource functions such as payroll, compliance, recruitment, and benefits administration. For that reason, HR outsourcing companies can be a powerful solution for small businesses. Outsourcing HR gives small businesses a large toolbelt of expertise, tools, and technology while keeping overhead costs low. 

If small companies don’t implement a successful HR strategy, the cost can be high. According to a CB Insights study, 23% of businesses fail because they don’t hire the right team. Hiring and retaining employees is critical to a small business’s success. 

Do Small Businesses Need HR? 

If your business has employees, then you need HR in some shape or form. However, the scale of in-house HR support for small businesses can vary by the company’s size, industry, and needs. Small businesses may structure their HR as part of one employee’s job duties, with a dedicated full-time employee, small department, or through outsourcing. 

What are the important HR requirements for small businesses? 

The most important HR requirements for small businesses fall into three main categories. First, keep people safe. This includes both physical safety and an environment free from harassment. Second, keep employees paid with easy access to their benefits. Attendance tracking and timely payroll are the most basic functions that a company should fulfill. Third, understand the law. Companies need to understand enough about applicable labor laws to be able to stay in compliance. 

Should a small business outsource HR? 

There are many pros and cons for whether a company should outsource HR. 

  • Pros. HR outsourcing companies for small businesses employ a team of experts that have tried-and-true solutions that an individual HR practitioner or business owner may not have. An outsourcing company will also have turnkey solutions for insurance providers and time tracking and payroll technology that would be costly and time-consuming for a company to research alone. In addition, outsourcing HR is often more efficient and cost-effective. 
  • Cons. Because an HR outsourcing company is offsite, it may be more difficult for them to understand the company culture and any issues in the company that need to be addressed because they are a level removed from the workplace. 

While there are many factors to consider for a small business, there are two important questions for business owners to ask themselves. First, what do you want the employee perception to be? Do I want their first impression to be professional and proficient, even from the first recruitment touchpoint? Second, how do I want to spend my time? Do I want to spend it implementing HR solutions or instead spend it helping my business grow? Outsourcing HR services enables a small business team to focus on what it knows best—its business. 

Milestone believes that no matter your business size, you should have the expertise and resources worthy of your entrepreneurial journey. Milestone partners with companies to provide HR and accounting services with a team of experts that has your back. Highly trained, specialized, and well equipped with the resources to help your business, contact Milestone to learn how we can help you turn HR into a true strength and differentiator for you.

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