30+ Advantages of Outsourcing Human Resources
When you work in HR outsourcing, one of the hardest questions to answer is: what does an HR consultant actually do? It would be easier to answer the question, “What does an HR consultant not do?”
Your company’s HR team is like a Swiss Army Knife: versatile, adaptable and ready to solve a thousand different problems each day. Most of those problems fall into one of three categories:
- Attracting: Building an employer brand and proposition that makes the best and brightest want to come be part of your team.
- Engaging: Making sure that team members have everything they need to succeed and resolving any issues that stand in the way of optimal performance.
- Retaining: Helping talented people build a long-term career path that benefits both employer and employee.
HR outsourcing companies can help with all of the admin, organization, and planning that goes along with these responsibilities. HR consultants can work part-time or full-time, and they'll help with everything from daily chores to high-level strategic planning.
In this guide, we’ll look at the many ways that human resources outsourcing can support your existing HR function or fill any skills gaps in your people strategy. But first, let’s take a closer look at the people who matter most: your employees.
Table of contents
- Outsourcing human resources at each step of the employment cycle
- Foundational HR: Day-to-day admin
- Operational HR: Managing your HR function
- Strategic HR: Building your HR function
- Getting started with HR outsourcing
Outsourcing human resources at each step of the employment cycle
HR is all about creating an environment for success in which your employees thrive. To do this, we first have to think about the employee experience from the moment they join until the day they leave.
The employment lifecycle involves four stages:
Stage 1: Recruitment
These days, the recruitment process begins long before you advertise a vacancy. Talented workers use social media to find out about employers, which means you need to develop and promote your employer brand.
You also require a smooth, frictionless hiring process that identifies the right candidate in the shortest possible timeframe. That candidate may have multiple offers, so you need HR professionals to design an attractive and competitive Total Rewards package.
Stage 2: Engagement
Engagement starts during onboarding, where your new hire learns about your goals and values. A great onboarding experience will help new people discover their importance in your mission.
The first 60 days after hiring are crucial. If you can’t fully engage new employees in that time, they’re likely to quit and pursue another offer. HR can keep a close eye during this window to ensure your hire is successful.
Stage 3: Retention
There’s always a danger that one of your team members might move on. HR’s role is to monitor engagement, identify retention risks, and take steps to retain your best staff. Regular monitoring of engagement levels will help reduce your staff turnover rate.
HR also has to deal with any issues that may impact employee retention. This can include handling complaints, managing benefits, dealing with salary negotiations, and working on long-term training and development programs.
Stage 4: Exit
Every employee leaves eventually, whether because of an internal move, a voluntary separation (such as retirement or resignation), or involuntary separation (dismissal or RIF). HR handles all of these exits to ensure a smooth transition and avoid negative reviews on sites like Glassdoor.
When one person exits, another joins. HR can help manage the next employee’s lifecycle by carefully reviewing job descriptions and skills requirements. This helps ensure that your next hire is exactly the right fit for your team.
HR outsourcing can help every step of the way
As you can see, a lot of HR work is involved in each employee’s lifecycle. Your HR team needs a wide variety of skills, including recruitment experts, payroll service professionals, compliance gurus, and marketing geniuses.
HR outsourcing gives you access to an army of skilled HR professionals who can have the skills you need. Your HR outsourcing can support you with HR tasks of varying complexity, such as:
- Foundational HR: HR administrative tasks, such as communication and query processing
- Operational HR: HR management tasks, like recruitment and overseeing professional development
- Strategic HR: HR leadership, including compliance, strategy, and workforce planning
Let's take a closer look at how each type of outsourced HR can support your business needs.
Foundational HR outsourcing services: Day-to-day admin
HR work is time-consuming. There are stats to collate, reports to complete, and employee queries to address.
Foundational HR consulting provides a reliable HR expert who can tackle these chores. Here are some of the human resource functions that you can outsource:
1. Candidate Sourcing
Your HR outsourcing consultant will have an excellent knowledge of candidate sourcing methods to speed your staffing process. They will help advertise your vacancy to the most expansive talent pool, and they can connect you with audiences that you might not otherwise find. Consultants can also help with initial screenings and background checks.
Interviews are a constant logistical challenge. Your HR admin team has to sync the candidate’s availability with the stakeholders who intend to be present at the interview. Consultants can communicate with all parties during the interview process and ensure that the candidate always knows what’s going to happen next.
A foundational HR consultant will reach out to the candidate with your offer and talk them through benefits, rewards, and other incentives for joining. The consultant will also answer any queries and assist with contract negotiations.
Onboarding is a vital part of a successful hire. Outsourced HR staff can help orient new hires by introducing them to the team, explaining policies, and discussing your organizational values.
5. Compensation & Benefits Administration
Even if you have an employee self-service portal, there’s always a lot of HR administration work required to handle employee queries about payroll processing, health insurance, and employee benefits packages. Your HR outsourcing consultant can handle employee queries, process requests, and provide status reports to leadership.
6. Employee Relations
HR is the go-to department for most employee queries. Outsourced HR solutions make it easier to deal with policy queries, handle complaints, and gather feedback on your professional development program. They can also help employees manage their self-service tools and educate them about benefits.
7. Employee Communications
Your HR outsourcing consultant can help maintain healthy, two-way communication with the team. This can involve passing out messages about new policies or gathering employee feedback about the current state of play. HRO consultants can also send important communications to employees and update important documents, such as the employee handbook.
8. Separations & Exit Interviews
Handling exits is a key part of HR work. Your HR consultant can sensitively deal with separations and ensure that employees leave on the best possible terms. They may also perform exit interviews to help you understand what you could be doing better.
9. Compliance, Reporting & Recordkeeping
All of the functions listed above involve an enormous amount of paperwork. If your team handles government contracts, this will include complex regulatory filings. A skilled HR outsourcing consultant can help you stay organized and compliant with all employment laws.
Operational HR outsourcing services: Managing your HR function
As your business grows, your HR team will need more organization and oversight. An HR outsourcing consultant can step in at this point to offer operational HR support.
At this level, your HR consulting partner will work alongside your in-house HR team to deliver immediate results with an eye on long-term efficiency. Here are some of the human resources management tasks that an operational HR consulting partner can help with:
10. Hiring Process
If you want to build a strong team, you need a scalable and efficient recruitment process. That means defining job requirements, being smart about how you structure interviews, and keeping Time-To-Hire to a minimum. Your recruitment process consultant will work with you to build a process that consistently gets the right person.
11. Onboarding & Assimilation
HR consultants can help develop an onboarding process that delivers maximum retention in the first 60 days. This process will help new hires get a crash course on your values, mission, and organizational culture. By the end of the process, they will be fully assimilated and ready to become team players.
12. Total Rewards Strategy
Total Rewards is always a delicate balance: you have to offer a package that allows you to attract and retain, but this package must be fiscally sustainable. The trick is understanding employees’ needs and building a rewards package that speaks to them. An HR consultant can help you define and deliver the right Total Rewards strategy.
13. Career Pathing
Engagement and retention both require well-defined career paths. Every member of your team should have a clear vision of their future in the company, and an action plan that helps deliver that future. Operational HR consultants will oversee your career pathing strategy and ensure everyone feels equally included.
14. Training & Development
Professional development is the practical side of career pathing. Your HR consulting partner can help ensure everyone is on track to achieve their training and development goals. This may involve implementing eLearning systems or working with education partners. HR can also help deliver statutory training, such as workplace safety.
15. Employee Relations
Managing employee relations is one of the most important parts of HR—get this wrong, and you could lose your best people. An operational HR consultant will ensure that all employees feel listened to and respected. They will also flag the kind of issues that drive away good people, such as a toxic organizational culture.
16. Policies & Procedures
How do you put workplace policies into effect? This is a task for a comprehensive HR consulting partner who can help define the nitty-gritty of things like respectful workplace policy or cybersecurity procedures. HR can also help educate team members about these policies while handling queries and breaches.
17. HR Information Systems
HRIS is of crucial importance, especially if your employees manage their personal details through a self-service portal. HR consulting partners can help you choose, install, integrate and optimize your new HRIS system to offer the maximum return on investment.
18. Performance Management
Productivity measuring can sometimes be inconsistent, with different teams working to different yardsticks. An HR consulting partner can help you define a company-wide performance management strategy that gives everyone achievable goals and standardized metrics. This ensures that you’re getting value from your team and allows you to award bonuses and incentives even-handedly.
19. Voluntary separations
Your HR team can help you plan for anticipated staff turnover, such as retirements. This might involve working on a succession plan to help find a replacement or organizing mentoring sessions with the outgoing employee.
20. Involuntary separations
Layoffs and dismissals must be handled delicately. An HR consultant can guide you through this process and try to make things as painless as possible for both employer and employee. In the event of resignations, they can conduct exit interviews and find out if there are any major retention issues.
21. M&A Due Diligence
Mergers and acquisitions will bring together two distinct HR functions. There’s a lot of oversight involved in this process, as both companies must disclose any issues that could pose a challenge during the M&A. An HR service provider can help you make full disclosure, while also helping you understand the other organization’s current HR strategy.
Strategic HR outsourcing services: Building your HR function
Foundational HR and Operational HR have one big thing in common: they’re both reactive. Your consultant works hard to meet your HR needs as they emerge. But what happens when you need someone to help with long-term planning?
Strategic HR consultants can help you define and deliver ambitious goals. Strategic HR partners will also help you figure out how to go about achieving your goals by offering services such as:
22. Organizational Development
Perhaps the main role of a Strategic HR consulting partner is to look at your current people function and ask: how can we be better? They will first help you analyze and understand your existing HR function, and use risk management techniques to avoid compliance issues. Then, they will help craft a strategy that delivers an efficient and engaged team. Your consultant will also look to the future and help implement processes that support your growth strategy.
23. HR alignment
Is your HR team aligned with your strategy, culture and values? If not, then that will lead to misalignment across the organization, with leadership and employees pulling in different directions. Strategic HR consultants can work with your C-Suite to ensure everyone is aligned with the same core principles.
24. Executive Recruitment
Hiring for the C-Suite is different from regular hiring. You’re looking for someone who will guide your company for years to come, which means you need the best of the best. An Executive Recruitment consultant can guide you through this process so you end up with the right people for your top jobs.
25. Executive Compensation
Executive compensation is also very different from your employee Total Rewards strategy. You have to create a structure that attracts the best talent to your company and incentivizes them to deliver sustained growth. An executive compensation expert can help you to develop a package that will appeal to your dream candidate.
26. Leadership Development and Coaching
Now that you’ve got the right leader in place, it’s time to invest in them. Strategic HR consultants can help develop and implement a leadership development program that empowers your executives to deliver their vision. HR consulting partners can also offer coaching to help senior leaders deal with blind spots and knowledge gaps.
27. M&A Integration Strategy
HR integration is one of the trickiest parts of an M&A. Your HR consultant can help you manage so that you bring out the best elements of both teams, and create a harmonized HR strategy. They will also tackle the considerable compliance and contractual issues that can arise during a merger.
28. Workforce Planning
Demand planning must be precise, lest you find yourself with too few or too many people on the team. A strategic HR consultant can help you develop a workforce planning strategy that maximizes your utilization of all employees, keeping your labor budget to a minimum. They’ll also ensure that your plans are scalable so your team can grow in line with your business.
29. Succession Planning
Who will replace your top leadership when they retire or move on? Ideally, someone from within the ranks who has lived your values and culture. Succession planning is a long-term process that involves identifying leadership potential, developing candidates, and organizing mentoring sessions. A strategic HR consultant can help you put this process in place.
30. Employer Branding
As an employer, you are constantly marketing yourself to potential candidates, even when you’re not actively recruiting. A strategic HR consultant can help you build a consistent marketing strategy that works on social media and at employment fairs. They will help get the message out about why your company is the ideal place to build their careers.
31. Diversity, Equity and Inclusion
DE&I is an essential element of any HR strategy these days. Not only is it vital in order to prevent discrimination lawsuits, but employees now expect it—nearly half of Gen Z candidates say that they would not work for an employer with a poor record on DE&I. A strategic HR consulting partner can help you formulate a DE&I strategy that’s genuinely inclusive for everyone.
32. Culture & Behaviors
Organizational culture is the whole ballgame. It defines who you hire, whether they stay, and how they perform their duties and interact with their colleagues. A strategic HR consultant can help ensure your company culture is aligned with your strategy. They can also help to identify cultural issues and address any toxicity.
Getting started with HR outsourcing
As you can see above, the best HR consulting partner can play a vital role in your organization. Whether answering employee queries or helping to find your next CEO, your HR consultant plays a vital role in your success.
That’s why it’s essential to find an HR consulting partner that is:
- Reliable: A firm with a strong track record of helping companies like yours
- Experienced: A partner with experience in your niche or sector
- Flexible: Your HR outsourcing solutions partner can provide full-service support or work alongside your internal HR department
- Knowledgeable: An HR consultant that knows the latest compliance requirements and other issues that may impact your human capital strategy
- Values-drive: Someone that shares your values and understands your organization’s mission
Helios HR has been helping business owners in the Greater D.C. area for over 20 years. We’re proud to have assisted so many organizations, from startups to multinationals, and we’re proud to have been part of their success.
Want to talk about how outsourcing HR can help your business grow? Book a no-obligation consultation call today!