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The Cost of Not Outsourcing HR

Posted on August 6, 2015
Sarah ShepherdWritten by Sarah Shepherd | Email author

performance reviewWe live in a world of “make it work.” When there’s no oregano, we substitute rosemary. Or when we have a cold, we take a Dayquil and get ready to tackle the day. When our company grows too fast, we piece together an HR function. You’ll notice that one of these things is not like the other. One will affect your pasta sauce or how alert you are, the other may determine if your company will go out of business or still be able to win government contracts.

Though we at Helios love to see our clients promote from within, it is common for us to actually meet our clients when the strain of having anywhere from one to four people “making it work” becomes too much for the organization to continue to bear. From a functional perspective, promoting from within is a good thing and makes sense. We often take software developers and make them supervisors of a team. Or take supervisors and make them directors. Where we run into trouble is crossing that functional line. For example, we take a quality control specialist who is smart, agile, and hardworking and make them an HR representative.

With 10, 15, 20 employees HR is mostly about I-9s, tax forms, and getting people on the payroll. But as your organization grows, the HR issues, both for the individuals and the organization, are more complex and require a depth and breadth of HR knowledge individuals not “native” to HR may struggle to overcome.

  • They don’t know what they don’t know…In the last year, there have been changes to OFCCP compliance, the definition of a spouse, minimum wage and wage reporting, marijuana legality, and more – and some of that is specific to the DMV area. HR professionals know where to find the information, how to analyze it, and what questions to ask to make sure we continue to protect our organizations. Having someone on your team who can take the regulations, analyze them, and execute the appropriate actions is vital to ensuring you can continue to do business with the knowledge that your liability has been reduced as much as possible.
  • …and they don’t know who to ask. At Helios, we are lucky to have an entire team of HR professionals to rely on. If I am stuck on a problem, I can call on a team of nearly 30 folks for the expertise, insight, and guidance that I need, and that doesn’t include my network of HR colleagues. If your HR team doesn’t have a background in the field, or without a network that brings the expertise, the right questions aren’t being asked. Your company’s compliance liability is significantly increased, and the worst part is that you probably aren’t even aware.
  • You’ve taken a rock star off the stage. The story we commonly hear about homegrown HR is that there was someone or a small cohort of people who were smart, agile, and hardworking. They needed a new challenge or were willing to help. This is great news! You have engaged employees who want to make your business better. By offering them this challenge, however, you have taken a great performer out of their field of expertise. By then tacking on the additional struggle of “figuring out” their new job, you may drive down engagement and send their frustrations into hyper drive. Giving development opportunities and support from more seasoned HR professionals will help keep that employee’s excitement tank filled to overflowing.

Having aspects of a homegrown HR presence isn’t always a bad thing. Someone internal knows where your company has come from and how the culture has matured over the years. By tapping into, but not hijacking, some of your most valuable resources, the HR partner you identify will be able to hit the ground running with a great deal of historical knowledge and passion.

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