Why Would a Company Outsource HR?

Outsourcing HR gives you access to different skills

When a company outsources HR, they get access to different skills and experience levels.  As we mentioned above, companies tend to need different skills at different times and with an outsourced model, they can access this. 

What we tend to see when we start a new outsourcing engagement is that there is some tidy up work to be done initially.  This may mean that there is more need for HR Consultant and HR Administration skills.  The HR Consultant can identify any gaps in process, documentation and compliance, and the HR Administrator can then work on addressing those gaps.

Having completed this tidy up, the company may need some Senior HR support as they start to define their HR strategy and HR priorities for the coming year.  Having created that plan, they may need more HR Consultant time so as to deliver against their objectives.

With an outsourcing model, the above is all achievable.  Outsourcing offers maximum flexibility when it comes to accessing the skills a business needs.

Outsourcing HR gives you access to different volumes of support

The world of HR is very rarely stable! 

There will be times when a business is particularly busy with all things HR – salary review time, performance review time, large recruitment campaigns.  Then there can be times when things are quieter – the employees are behaving themselves, there are minimal issues and staff turnover is low, so there are limited comings and goings, and no large projects are in flight.

If you pick a provider (like us) that gives you flexibility, with an outsourcing model, your outsourced HR service can deal with these peaks and troughs in demand, and so you don’t have someone sitting around looking for things to occupy themselves.

Outsourcing HR gives you access to expertise

One of the key benefits of engaging with an outsourcing provider is that you have access not only to the assigned team, but to all the knowledge that their colleagues have! 

As an example, we work with hundreds of companies and have experience in almost every industry sector.  Companies that appoint us as their HR outsourcing provider gain access to all our experience and insight. 

Good outsourcing providers will dedicate time to ensuring that their employees are fully aware of what is changing in relation to employment law as well as what is happening in the market overall. 

Outsourcing HR is cost effective

When you outsource HR, you will only be paying for the support you need. 

As mentioned above, to get the HR support that a company needs, they often need to think about hiring multiple individuals with different skill sets. 

HR can become expensive very quickly with an internal HR model as companies can find themselves paying for a senior resource to do relatively simple HR activities, just to ensure that they have someone senior to deal with more complex things if and when they arise.

With an outsourcing model, a company only pays for what they need.  Need 10 hours per month of HR Administration? That’s what you pay for.  You also don’t need to worry about holiday, sick pay, pension, or training costs.

Provides you with objectivity for managing HR

Compared to having in-house HR support, a key benefit of outsourcing HR is that an outsourcing provider will remain objective.  One of the biggest challenges for in-house HR individuals, whether they are fully dedicated to HR or whether they are doing HR tasks alongside another role, is remain objective and impartial. 

It can be very challenging dealing with HR matters when you have a personal relationship with an individual.  Equally, it can be very challenging telling a business that they are not doing the right thing when that business pays your salary and is responsible for your career progression.

An outsourcing provider does not need to contend with these challenges.  There is a different relationship between an outsource provider and a company – one of supplier and client.  An outsource provider is keen to ensure a successful, ongoing relationship but also has extensive experience at delivering difficult messages. 

An outsource provider understands that there are times when it is necessary to have a robust conversation with a client so as to ensure that client minimises the chances of finding themselves in an employment tribunal.  It’s the job of the outsource provider to protect their client’s best interests, even if this sometimes requires them to be ‘bad cop’!

Manager’s Guide to HR Support for SME

Read our comprehensive guide on HR support for SME. The guide sets out the various ways that businesses can get HR support and the advantages and disadvantages of each option.