If you’re a small to midsized business owner, you know the frustration of spending more time than necessary on non-revenue generating activities. From HR management to benefits administration, your HR department may find that they’re spending a significant portion of their day engaged in these necessary yet time consuming tasks. For many businesses in this situation, the answer is to outsource part or all of their HR functions to a third-party provider in order to spend more time focusing on the core of their business.
Some of the biggest reasons that businesses choose to outsource their payroll and HR are: access to skills and knowledge, the ability to gain better support than they would receive from an in-house staff and cost savings. But when does it make sense for you to outsource your payroll? Before making this decision, there are a few questions to ask yourself.
How many employees does your company have?
On average, businesses that have fewer than 50 employees rarely have an in-house HR staff. Instead, they may have a manager or director who dabbles in HR because they have some relevant experience or because they’re the only one who is available to take on those roles and responsibilities. Organizations who have more than 50 employees will often find it easier to have an in-house HR department. Although they may still require some outsourced HR support, they’re likely to keep most of the responsibilities in-house. On the other hand, businesses with fewer employees may find it easier to outsource their HR responsibilities, especially when it comes to dealing with payroll.
What services do you need?
If you’re thinking about outsourcing some or all of your HR department’s functions, it’s important to establish what services you’re looking for. Payroll is one of the most common HR functions for businesses to outsource – regardless of if they have an in-house HR department. Payroll is one of the most important functions of any business, but it is often the most time consuming and tedious. Many third-party payroll vendors also offer additional services including time and attendance, benefits administration and talent management. It’s important that you take the time to determine which services you’re looking for so you can find a vendor that meets your needs.
How much are you looking to spend?
Although cost shouldn’t be the determining factor when choosing a provider to handle your HR management, it’s still important that you figure out how much you’re willing to spend. Every company has a budget for different areas of their business, and HR and payroll is no different. When looking for an HR or payroll provider, you need to understand how the outsourced service is billed to ensure that it fits within your budget every month.
What type of provider are you looking for?
Are you looking for a provider that can meet with you face-to-face, that understands the culture of your business and can act as your very own HR department? Or are you looking for an online vendor that can provide support by phone or email and has less personal service but may be less expensive? There’s no right or wrong answer when it comes to choosing an outsourced provider, and it’s really all about what you’re looking for and the level of support that you need.
It’s not always easy making the decision to outsource your company’s HR department or payroll functions, but sometimes, it’s a necessary step in order to bring more focus back to your business.
