Is It Time to Outsource Human Resources?

Jun 08, 2023

Most business owners know the frustration of spending more time than they want or should on non-revenue-generating activities. From benefits and human resource management to Compliance and conflict resolution, entrepreneurs can spend up to 40 percent of their precious day engaged in these necessary but time-consuming tasks.

Most small businesses are under 50 employees. That means the owner is the most productive and their role is extremely critical to the success of the business, Owners have to get out there and generate sales and products. When small businesses outsource non-core activities, they can focus on the business of their business.

When does it make sense to outsource Human Resources?

In assessing whether or not you should outsource Human Resources, there are several questions to consider before you make a decision:

How big is your company? Expert opinion varies on how large a company should be before it outsources HR. A general rule of thumb is "when administrative processes begin slowing down the productivity of the firm," While it is different for every company, this typically occurs when a business reaches ten employees. Once a company gets very big, then it is easier to have an in-house HR department.
How much control do you want over your HR functions? If a business owner wants to control all aspects of a business and is not open to suggestions or following through on recommendations an HR Consultant makes, then outsourcing may not make sense.
What services do you need? "Picking the right level of HR outsourcing is of paramount importance to your company.