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HR Outsourcing for Small Businesses: Everything You Need to Know

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Many small business enterprises spend their time, energy, and money on human resources. Tedious tasks such as calculating payroll and tracking employee hours can eat up time that could be spent on business development.

Does this sound familiar? Here comes good news, utilizing an outsourced human resource solution can help you handle multiple HR responsibilities, thus giving your HR department the time to focus on the bigger picture.

Understand HR Outsourcing Services

Traditionally when small businesses outsourced their HR functions, they usually allocated multiple human resource tasks and activities to a third-party company. But today, human resource outsourcing by adopting software has become easier than ever.

Utilizing human resource management software provides a one-stop solution that can adapt to your specific requirements. The outsourced HR system organizes every process into a simplified, streamlined, and easily accessible platform. With one simple click, you can view all available data on every employee.

Small businesses outsourcing their HR tasks can be advantageous in many aspects, but its most useful cause is compliance. Employment laws are constantly adapting and changing if you don’t keep track of every slight alteration you could easily fall out of compliance. Non-compliant organizations can find themselves in a world of trouble.

When trying to get your organization off the ground, any unwelcome lawsuit can drain the already limited resources you have at your disposal. Outsourcing your human resource tasks to software helps you keep track of any legal obligations, thus protecting your company from these costly and time-consuming lawsuits.

Types of Human Resource Functions that are Easily Outsourced

Small businesses outsourcing HR eliminates the routine functions that do not require any face-to-face interaction. A few examples of these easily outsourced HR functions are:

  1. Payroll Management
  2. Time Tracking
  3. Recruiting
  4. Employee Benefits
  5. Staffing
  6. Shift Scheduling

Responsibilities that are more hands-on such as conflict mediations, are usually kept in-house. Although any HR function can be outsourced, it is up to you to examine your small business requirements and make a choice that is suitable for you.

Cost Associated with HR Outsourcing

Small business outsourcing HR software is always a cost-effective option. Expenses can differ depending on the size of your business and the platform you choose to use. When you are charged in fixed price increments, you can expect to pay anywhere from $3 to $300 for each employee per month.

Whereas, when you are paying a percentage, every month, you will likely pay somewhere from 3% to 30% of every employee’s yearly salary.

What you should pay also depends on the plan you purchase. Robust HR solutions will start you off with a couple of major features, but premium membership is where you can truly reap some rewards.

Is HR Outsourcing Really Possible?

Today, even the smallest organizations can benefit from HR outsourcing. The smaller the business is, the more advantageous it is to outsource your HR functions. In order to make a small business work successfully, each staff needs to fill various positions and responsibilities as they are required.

As the number of hats each member must wear increases, is less the time they have to focus on their official position. When you discover, you must take on more work than you could manage. This becomes a clear sign you need to outsource your HR functions. Take time to establish your requirements and find a plan that works the best for you.

Here is the complete beginner’s guide to setting up HR Software in the Cloud for all businesses.

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