Outsource It: How HR Outsourcing Can Help Small Businesses


Businesses of all sizes are turning to HR outsourcing as a way to grow and deliver more value while reducing various operational costs. In 2018, the global outsourcing market was worth a staggering $85.6 billion. Big names like Apple, Amazon, Microsoft, and Dell all use this practice to expand their reach and ensure maximum productivity.

Just because you’re a small business, doesn’t mean you can’t outsource your operations. In fact, outsourcing might just be exactly what you need to drive growth and innovation without going over your budget.

Let’s take human resources, for example. As a small business, you probably don’t have your own HR department. Outsourcing this function will free up your time and make it easier to attract top talent.

But what does HR outsourcing involve? Most importantly, how does it benefit your business? Let’s find out!

What Is HR Outsourcing?

This popular business practice involves subcontracting human resources functions to a third-party organization.

Basically, it’s the process of hiring an external supplier to manage HR functions such as recruiting, training, and even payroll. More than 150,000 small and medium-sized businesses use professional employer organizations (PEOs) for this purpose.

PEOs can also provide regulatory compliance assistance, fill out paperwork, and handle benefits administration.

Depending on your needs, you can outsource a few administrative tasks, or outsource your entire HR department.

Why Outsource HR?

There are a great deal of administrative functions that HR outsourcing can assist with, so let’s use the example of recruitment to help answer this question.

Small business owners often seek talented employees that can help their organizations grow. You post ads on Glassdoor, Indeed, Angel.co, and other job platforms. Resumes keep coming in and your schedule gets busier.

The recruitment process alone can take weeks or even months. You need to check the resume, schedule job interviews, screen each candidate, and decide who you want in your team.

Months later, you still haven’t found the right people. Even if you did, you need to handle tons of paperwork and take care of the small details. You also need to train the employee once they are onboard. This leaves you little or no time to actually grow your business and market your products or services.

In the worst case scenario, you could end up making costly mistakes. Perhaps you’re not familiar with the employment laws in your state. Or maybe you lose control over the entire process.

Why take unnecessary risks and waste valuable time when you can outsource these tasks to the pros? HR service providers can manage these tasks on your behalf, allowing you to focus on the core aspects of your business.

Grow Your Business the Smart Way

From lower costs and workforce turnover to faster growth, HR outsourcing benefits small businesses in a multitude of ways. It minimizes paperwork, saves time, and allows you to focus your energy on core business activities that generate revenue.

In fact, small businesses that work with HR service providers are 50 percent less likely to go out of business. They also grow up to nine percent faster and have lower employee turnover rates.

Are you ready to make this move? Check out the perks of PEO services to learn why HR outsourcing is a must for small business growth.


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