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The Pros and Cons of Outsourcing HR

Outsourcing has grown considerably in the last few years as a legitimate industry bringing considerable benefits to companies of all shapes and sizes. Businesses are finding that they gain more than they lose when they outsource certain services that aren’t part of their company’s core competencies. 

One of the most popular departments to outsource is Human Resources. There are many HR outsourcing companies on the market that can provide businesses with a wealth of services at a fraction of the cost of hiring on-staff personnel. 

But, is outsourcing HR services really worth it? Below are some of the pros and cons of doing so. 

Pros of Outsourcing HR 

There are many benefits that your company can get out of outsourcing HR services.  

Here are some of the top benefits. 

Money Savings 

The most obvious pro of outsourcing HR is that it can save your company money, especially if you’re a small- to mid-sized business. You will pay a fee to the company you hire to handle all of your HR functions, but it can often be considerably less expensive than hiring a full staff of HR professionals to work in-house. 

Even large companies today are outsourcing at least some of their HR services, especially those that are mundane and take a lot of time. 

Redirect Resources 

By saving money on HR services and becoming more efficient in that department, companies are able to redirect the resources they have to other areas that actually bring back a positive ROI. 

Today, there are many ways that companies can outsource certain services in their HR department, allowing their on-staff HR personnel to focus on the more important functions that help the company thrive. 

When HR personnel don’t have to worry about data entry, document creation and editing, creating policies, benefits and payroll, for instance, they can spend more time on things such as building morale, managing risk and recruiting, hiring and training. 

These are all areas that can truly make a difference at your company. 

Added Expertise 

Another huge pro of outsourcing HR services is that you’ll be getting highly-trained experts in their field working on your behalf. This factor comes into play especially if you don’t have that talent on your staff already, or if you can’t afford to hire people with these skills and knowledge. 

A large function of HR departments is compliance. This can be extremely complicated, depending on which sector your company is in, and it can also get more complicated as your company grows. 

When you outsource HR services, you can be confident that the professionals you hire are fully educated about all the different legal compliance issues that apply to you. This is peace of mind that you might have trouble getting by hiring HR professionals to work on your staff. 

Cons of Outsourcing HR 

There are, of course, some possible cons of outsourcing HR services. Some things to consider are listed here. 

Loss of Control 

When you outsource HR services, you’ll be entrusting an outside third party with handling one of the most important functions of your company. While this outsourcing company will be working for you, they won’t be completely under your purview. 

They won’t be on your payroll or work in your office with your other employees. This means you’ll have to be comfortable giving up at least some control. Doing so might be challenging for some companies, depending on how much direct control and oversight they feel they need to have. 

Loss of Human Connection 

While outsourcing HR services isn’t the same as, say, automating processes through artificial intelligence or other technological services, you will still lose some human connection.  

HR has direct oversight over people in your company, and the department often works best when they can connect with the employee base directly. When you outsource HR services, you’ll lose that aspect of the business. 

You can certainly interact with the workers at the outsourcing company you hire, but it won’t be the same as being able to walk down the hall to talk with them in person. 

Loss of Availability 

HR outsourcing companies are able to succeed because they have multiple clients that they work for at the same time. While this is great for them and their business model, it means you won’t have direct access to them whenever you need them. 

There might be times when you reach out to your outsourcing company that they’re simply not available. They might be busy working for another client, for instance, and won’t be able to get back to you right away. 

If you outsource HR services, you’ll need to understand that there may be a lag between when you reach out and when they can serve you. 

Outsource HR Services with Beckham Insurance Group 

Like anything in business, there are pros and cons of outsourcing HR services. Many businesses have found that outsourcing this crucial function of their company can bring back significant ROI. 

To ensure a positive relationship, though, you need to make sure that you find a reputable HR outsourcing company that can provide you exactly what you need. 

If your business is in the Georgia or South Carolina region, Beckham Insurance Group is that company. Our professionals have years of experience providing guidance and services in HR, benefits and more to businesses just like yours. 

Contact us today to find out more about how we can help move your business forward.