Your business growth means you need more employees. Congrats!

How are you handling the onboarding process for those new faces? Do you know how to handle benefits administration?

Small businesses go through growing pains when it comes to HR. You need staff to keep growing. But you’re not quite in a position to hire an HR team.

How do you get the HR support you need? A fit for many small businesses is outsourcing. Small businesses choose outsourcing for all aspects of the business, from bookkeeping responsibilities to HR services.

Outsourcing work for small businesses saves time and money. Keep reading to learn how outsourcing HR can help you and how it compares to hiring an in-house HR staff. 

Cost of HR

Using outsourced HR services saves you money to help keep your small business budget on track. When you outsource, you pay a set price for the services. You know what you’re paying and can plan for it.

When you hire a full-time in-house HR staff member, you have to pay the salary and benefits no matter what. With outsourced HR, you only need to pay for the amount of work you need done. Even if the hourly rate works out to more than hiring an employee, you might save overall if you only need a few hours of work done.

You also cut the costs of benefits and other perks. You don’t have to provide the workspace, computer, and other equipment with outsourcing as you do with an in-house employee. You also eliminate the costs of ongoing training and education.

Knowledge and Experience 

A lot goes into learning payroll and HR. Small business HR covers a range of duties, including interviews, job offers, training, benefits administration, and payroll.

Many small businesses start out adding the HR duties onto someone else’s plate. As the owner, you might handle it. Or you might assign your administrative assistant with those duties.

The drawback of this approach is the lack of expertise. Do you know the best practices for interviewing and hiring? Do you know how to calculate payroll and deduct taxes and other contributions accurately?

IRS requirements for hiring employees can also be tricky. You have to verify employment and handle withholdings properly.

Failing to meet those requirements or making mistakes on your calculations can result in fines and penalties.

If you hire an in-house HR person, you need to find someone who can cover all of those different areas. When you’re small, you don’t have the need for separate roles for each of those duties. It can be challenging to find one person who has experience in all those areas. 

Outsourced HR gives you full access to HR and payroll experts. You know the work gets done correctly because it’s done by pros. Reducing the risk of errors can prevent you from facing penalties for mistakes.

Time Spent on HR Work

Say you have a basic understanding of HR. You feel confident that you can onboard employees correctly, calculate payroll, and satisfy IRS requirements. Should you handle HR yourself?

Time is a critical factor in making the decision. If you have a current staff member handle HR duties, you take that person’s time away from other activities.

HR isn’t a revenue-generating activity. Sure, it’s integral to your company’s success. But it doesn’t directly generate revenue for your business.

Entrepreneurs use as much as 40 percent of their time on those administrative tasks that don’t generate revenue.

Taking yourself or your employees away from revenue-generating activities to handle HR costs you time and potentially money. You may come out ahead by paying to outsource HR while your current staff works hard to generate more income.

Outsourcing frees up your time for your core business activities. The work gets done in a timely manner because the outsourcing company focuses only on those activities. If you’re doing HR yourself, you might put it off to handle other duties first, which can delay important deadlines.

Another time advantage of outsourcing HR is the option to use only what you need. If you have a small business, you probably don’t have enough work to keep a full-time HR person busy. 

When you outsource, you only need to contract for the amount of work you have to do. This can be a more efficient use of your money.

Explore Our HR Services

Even small businesses benefit from outsourcing HR duties. Is your business ready to free up time handling hiring, paperwork, benefits, and payroll?

Learn more about our payroll and HR services to see how we can make your business run more efficiently.