Human resources encompasses a wide array of different workforce-related tasks, including recruiting and hiring, benefits administration, talent development, payroll, and compliance. These tasks can be complex, time consuming, and overwhelming for even the most determined and dedicated small business owner.

Your employees are your small business’s most important asset. It pays to have experts handling the human resources function in order to ensure that these employees are properly managed. Here are some of the top benefits that your small business will enjoy by outsourcing HR.


Managing your own HR team in house can be costly. You must pay higher overhead costs for salaries, benefits, vacation days, sick days, and more. You must invest in software and technology. You must pay for supplies and equipment.

When you outsource HR, all of the money saved from eliminating the in-house human resources department can be invested elsewhere in your business, such as in marketing, customer service, sales, or expansion.

Outsourced HR providers offer on-demand solutions, so you only pay for the work that’s being done for your company. There are no hidden fees or additional charges at the end of the day. All costs for supplies, technology, and equipment are inclusive in the rate. The rates are highly competitive and they’ll no doubt allow you to save on costs.


Managing your HR function in house comes with many risks and compliance concerns. Human resources is complex and fraught with laws, regulations, and rules that must be followed. It can be difficult for small businesses to keep on top of all laws and regular legislative changes. If you misinterpret or fail to follow just one law, whether it has to do with payroll, taxes, health and safety, or something else, you could face significant fines, penalties, and even lawsuits.

Outsourcing HR can help you manage risks. You’ll have human resources experts handling the tasks, which can help ensure that your company is continuously compliant with all relevant laws and regulations. Your HR provider will also maintain and audit your company practices and procedures to ensure that your employees are protected at all times.


As a small business owner, you may not have the funds required to staff a full HR department. You and your few employees may wear many hats, including HR administrator. This practice is not uncommon in the startup world. With nominal budgets, small business owners do the best they can with the resources at their disposal.

Unfortunately, though, this can lead to reduced productivity, higher risks of errors, a lack of efficiency, as well as employee burnout and low morale. By outsourcing HR, you can keep costs low without overburdening yourself or your small staff with work that is outside of their purview.


As mentioned above, if you or your employees were to wear the hat of HR administrator, there would no doubt be a higher risk of errors. You are not an HR expert, and therefore, you do not know all of the best practices, processes, and policies that need to be followed. You could end up making significant payroll mistakes and bad hiring decisions, put your employees’ health and safety at risk, or risk the financial viability of your company. The errors made from lack of experience and expertise can be detrimental.

Outsourcing HR can ensure that all tasks are handled by HR experts to reduce the risk of costly and dangerous errors from occurring.


It can be difficult to grow your business with only a few helping hands. If you’re already struggling with your company’s payroll needs, recruitment and hiring needs, compliance requirements, and other HR tasks, it may seem impossible for you to grow and expand. You simply may not have the time to double up on your efforts or to handle more paperwork.

Your business’s growth does not have to be stalled due to a full plate, however. Outsourcing HR can allow you to have the administrative help you need, so you can focus on new business ventures.

Felicia Smith

Felicia is the manager of human capital solutions at AugmentHR. With over six years of recruitment experience coupled with multi-faceted HR roles, Felicia is an expert in matching people with the right role and environment. She has worked in many different industries, including investment banking, HR consulting firms, medical, and commercial. Understanding people is one of her strengths, and she has recruited at every level, from directors, project managers, and engineers to operators and general labourers. Her ability to network and develop relationships has been a key tool to her success. With approximately two years of experience managing people and creating a positive work environment, Felicia’s diverse skill set makes her a well-rounded individual. Her business education and background help her identify different business needs and human capital solutions.

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