When thinking about outsourcing HR, the first thing many business owners think is “will it be cost effective?”

The answer is yes! Especially for small businesses.

On average, a business will spend 60% less by outsourcing their HR when compared with recruiting in-house.

Of course, there are several cost factors to consider, including the number of employees you have, what services you need and what skills and experience you would need an in-house HR professional to have?

A key question many businesses ask when weighing up whether to outsource or not, is… “will an in-house HR professional be able to provide all the services I need or will I still need to outsource some elements”?

Another advantage to outsourcing your HR is that you will have access to a far deeper and wider HR skillset which can cover all potential aspects of your HR from the simple to the most complex. Often an in-house HR professional in a smaller business will be great at running HR processes and administration but may struggle with the more complex issues such as employee disputes or employee challenges. This often means outsourcing for advice to employment lawyers racking up the costs. A good, outsourced HR provider will be able to cover all bases with high quality advice for a fraction of the cost.

Of course there are benefits to having HR in-house such as not needing to trust a third party with your employees’ information, wellbeing and development for example and having someone there who can keep an ear to the ground as to whats happening wth your people. I wouldn't advocate outsourcing HR to the point where leadership contact between Managers and employees is lost either. However, the advantages of outsourcing and the cost difference alone is enough to make anyone consider outsourcing, especially smaller businesses with lower budgets. Human Resources people specialise in being great with other people too, which can massively benefit your business and the good ones will make sure that they get to know you, your business and your people, finding creative ways to keep an eye on how your people are feeling.

When you first start a business, you don’t tend to think about HR in the first instance. You’re excited that you’ve started doing work that you love, and not many people love contracts, employment law and payroll – unless you’re an HR expert! This is a reason to outsource, leave the things you’re not so passionate about to an expert.

In fact one my our clients said recently "there are some things we can't handle in-house because we're not qualified to. Why would I try and do something when I don't have a clue what I'm doing! I remember when I first started employing people and tried to deal with a poorly performing employee on my own, 6 months later and nothing had changed. I don't want to get into hot water by doing the wrong thing and for the saving in time and effort and the peace of mind knowing there is someone handling these things who knows what they're doing, every penny spent on outsourcing it, is worth it".

It can certainly make your day more enjoyable knowing you don’t have to spend hours writing new staff contracts or collating offer packs, updating your employee handbook or rewriting policies. You’ll also be stress free knowing you are complying with the ever-evolving employment laws when dealing with your staff.

I have always strongly believed in outsourcing as having someone else look after your HR or anything else you lack the will or skill to do, leaves you with more time to focus on what you love which is why your business exists and growing that for a bright future.

HR administration may not seem expensive to begin with, but the costs soon add up in the time and effort of you or your managers to recruit, onboard, draft and implement HR documentation, run absence and employee relations processes and much more along with the potentially high costs of getting it wrong. Then there is the knock on impact of other business processes suffering as a result of resource being distracted elsewhere.

Before I go, I want to bust a common misconception. Outsourcing HR only benefits businesses of a certain size or those who have no HR in-house. Nope!

Yes it’s true that the majority of our client base typically consists of companies with between 2 and 50 employees. However, outsourcing can benefit companies of any size.

You can outsource certain areas of HR in isolation to great effect.

In fact one client we work with, is a business of c.120 employees where they have their HR administration in house, but outsource all of the more complex HR issues to Skora HR including developing, mentoring and being on hand to advise and support the HR professional in-house. All for a saving of approximately £36,000 per annum!

Another client we work with is a company with c.2500 employees who outsource all their leadership development to us. They recognise that it’s more cost effective to outsource to an expert than have an expert in-house 100% of the time.

Even if you only outsource a specific area of your HR, it can still save a considerable amount of time and money. And with the prices of almost everything increasing, as Tesco say, every little helps!

If you’re now considering outsourcing your HR, find out more about what services we offer, or contact me to have a chat about how we can help!