Businesses are often faced with contradictory needs: there’s pressure to improve the bottom line, but rising overhead in order to deal with the volume of increasingly complex tasks. And, as businesses grow, they need human resources expertise. These organizations face a choice between creating or expanding an in-house HR team and outsourcing their HR functions. If you’re in this situation, here’s why you need to consider outsourcing your HR.


Whether you have an in-house HR team or you need to create an HR team for the first time, the fact is that you need expert knowledge for HR to function efficiently and effectively. Outsourcing HR offers an easy way to tap into the knowledge of experts. That’s a huge advantage for small businesses that may not yet have in-house expertise. It can also help bigger businesses manage special projects, even when those businesses do have in-house personnel.


In addition to getting expert knowledge, outsourcing your HR can also give you access to the best tools. Whether you’re looking to outsource your payroll function or to conduct a candidate search for your next CFO, HR consulting agencies often have not just the specialists, but the specialized tools to help you get the job done right.


One of the biggest challenges with HR is making sure the department is cost-effective. In-house departments may not be able to ramp up operations quickly and easily in the face of a new project or increased hiring demands. Similarly, it may be difficult to scale back HR functions when business slows down a bit. When you outsource, however, scalability is no longer a concern; your consultant will scale up and down as you need them to.


One thing that business owners worry about when outsourcing comes up is the cost. You might think that hiring someone else to do your HR could cost you more in the long run—or that you might pay for ineffectual service. That could seriously hurt your bottom line.

While the concern isn’t always misplaced, the truth is that outsourcing HR can actually be a more cost-effective solution for businesses. With better scalability, you will never pay more for HR than you need to. Level of service agreements can help you ensure that you’re getting the biggest bang for your buck. And outsourcing helps you keep your overhead at a more manageable level—which helps balance out the drive to improve the bottom line but also add more people.


What do you do when you need to add 10 positions by the end of the month to deal with an increase in volume, but you and your HR staff are all too busy to handle the recruiting process? Do you allow other work to go by the wayside? Do you try to hire another HR person to handle recruitment (making that 11 positions you need to add)? Or do you send the job out of house to a consultant, who has the time and energy to devote to your candidate search? Outsourcing HR can be an efficient solution when you and your staff are simply too busy to take on yet another task, but still need things to get done.


While outsourcing HR isn’t without its complications, it is a legitimate solution that more businesses should consider. Whether you need to hire a consultant to help you manage the implementation of a benefits plan, recruit candidates to fill positions in short order, or simply need to send a function out of house to free up your HR staff’s time, outsourcing HR could be the best option for your business.

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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