Why Small Businesses Are Outsourcing HR Functions


Making sure your business is running smoothly is not an easy task. If you are a small business owner you know sometimes it can feel overwhelming to deal with the number of tasks on your plate. When your business is in its beginning stages, but still continuously growing and expanding, you may not have the bandwidth to hire a human resources specialist on the team, but still, need to hire great team members for other areas of your business. That is why many small businesses have turned to outsource HR functions. Here are some of the reasons.

It Is Cheaper

Outsourcing HR functions reduces operating costs because you are spending less on salaries, getting reduced costs on insurance benefits, hiring, training as well as avoiding non-compliance penalties.

On average, a human resources manager makes more than $75,000 a year on top of benefits. If you outsource HR functions, you will save so much money a year on, especially if you are a small to medium-sized company. Outsourced HR and PEOs can negotiate lower rates that are typically only available for big companies with huge staff lists. They will also better vet employees so you are not wasting money on hiring the wrong people and you reduce turnover.

Most importantly, outsourcing HR and PEO frees up your time, which allows you to focus on running your business, thinking of new ideas and growing your company.

Greater Efficiency

Since you are a small business owner, there is a big chance you are handling the hiring and firing on your own. Not that you are not doing a great job, but you are not in the business of hiring and firing people. You are a creative or a problem-solver. You are a writer or an artisan. You are not an HR manager. Outsourcing these functions allows you to give something up to someone who is experienced. Since they are more experienced, they are less likely to make mistakes when it comes to hiring the right team. Instead of being inundated with payroll and benefits paperwork, you can pass this off to someone who knows this stuff like they know the backs of their hands.

Better Benefits

Your small team of employees works really hard to make your dream come true. Pay it forward and show your appreciation by offering comprehensive benefits packages. One way you can offer a better variety of benefits is to outsource HR. It gives you better access to more inclusive benefits packages that are usually reserved for larger companies that have the time and expertise to understand the complexities of managing health insurance and other benefits.

Doing this also gives your employees an opportunity to ask questions and get knowledgable answers about their benefits. Sometimes outsourcing HR also comes with a streamlined way to receive information about benefits and enrollment. This enables you to be free from miles of paperwork and confusing jargon that is not easy to understand. Visit https://xmigrowth.com for more.