What HR Functions Can Be Outsourced?

The Milestone Team August 13, 2021
What HR functions can be outsourced

It’s not easy being a full-time small business owner. And one of the most difficult parts is handling your most precious asset: your people. Human resources departments exist to make sure that the people you hire are right for the job, have the right mindset to do their best work, and can be a valuable asset to your organization. 

Playing such an important role, it’s no surprise that human resources is the most common outsourced function in a business. Savvy small business owners know their strengths and when to bring in outside help to achieve goals, and getting a team that specializes in human resources can bring a lot of positive change to an organization. 

Human resources encapsulates a lot more than just hiring, firing, and handling complaints. By outsourcing human resource functions and performance, you’re offering your business and your employees a wealth of knowledge and expertise that can make your organization a better place to work. So exactly what HR functions can be outsourced? Let’s look at a few. 

List of Human Resource Functions that Can Be Outsourced

HR outsourcing has advantages and disadvantages, and those change depending on the business. But there’s a certain sigh of relief that comes with knowing your business is following employee protection laws to the letter, because you have experts at the helm. But more than just compliance, there are numerous other functions you can outsource. 

Employee Administration – Every employee you hire requires a certain amount of paperwork. From onboarding to employee data updates to running the occasional employee investigation, an outsourced HR company will cover the administrative tasks associated with your workforce. 

Compensation & Benefits – Paying your workers—and doing it fairly—is the first step in reducing turnover. An outsourced HR company can help you determine fair and competitive compensation, plus suggest comparable benefits to offer. 

Talent Acquisition –  Finding the right people for your open positions can be difficult. But outsourced HR companies are usually skilled at tracking down pools of talent, weeding through resumes, and finding the one that’s the best fit. 

Performance Management – It’s important to keep your employees meeting their goals, so that you can meet yours. When you’re running every other function of a small business, it’s difficult to oversee all of your employees and keep everyone on track. An outsourced HR company can provide training and performance reviews to keep everyone performing at a high level. 

Employee Engagement – A great workplace can keep employees happy and productive for a long time. But they need to feel like they’re an integral part of what makes the machine move forward. Outsourcing employee engagement gives you an unbiased vision into the parts of your culture that you do well, and the areas where you can improve. 

Payroll – There’s no surer way to lose a workforce than to not pay them on time and in full. And maintaining payroll can be tricky, with taxes, withholdings, and salaries versus hourly wages. This is yet another HR function that can be outsourced to experts who make sure your workforce is compensated, and use reliable, modern software to keep track of the numbers for accounting. 

Lifecycle Development – It’s rare for an employee to spend their entire career at one business, and as an owner it’s important to realize that. But while you have them, you can benefit from their skills, help them grow, and get greater benefits from your relationship with them. A strong employee lifecycle is mutually beneficial, and experts at an HR company can help you create a solid structure for yours. 

Why Do Organizations Outsource HRM Functions?

People start businesses because they have a passion or a great idea. They rarely do so because they’re so highly functional in all of the areas required to manage a business. Part of your growth as a small business owner is knowing when to pass off certain functions to outside partners. There may be pros and cons to outsourcing HRM functions, but here are three very clear advantages. 

Expertise – You get the best thinking from people who have dedicated their lives to knowing human resources. Not only that, with an outsourced HR company, you’re likely getting people who specialize in certain tasks too. So not only do you get an excellent recruiter to help with talent acquisition, but you also get a great manager who can help them set and achieve goals in their performance reviews—and so much more.  

Employee Happiness – A good working environment is built around a solid foundation in human resources. When your employees know they’re valued, and that you’re investing in them and their futures as much as you’re investing in your own, you end up with an engaged workforce that’s ready to put in work to advance the goals of the company. 

Compliance – You’re dealing with people. And with that, there are a lot of laws surrounding your workforce. It can feel overwhelming. With an outsourced HR company, you know that your team of experts is totally fluent in the most updated versions of all human resource codes and policies. From HR forms to handbooks and I9 compliance, they’ve got you covered. 

Ready to outsource your HR and unlock the full potential of your most valuable resource? Milestone is dedicated to providing small and growing businesses with top-tier back office support, including outsourced human resources and accounting services. Click here to learn more and get started today.

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