By: Kayla Bell on July 13th, 2023

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Can You Outsource Human Resources, and What Are The Benefits?

When you’re building a team of HR professionals, the most important quality to look out for is trust.

Can you trust these people to nurture your company culture? Can you trust them with extremely sensitive data, including very employee information? Will your employees trust them to protect them in the event of disputes?

Trust-based relationships are crucial in human resources, which is why many organizations prefer to rely on an in-house HR team. But local teams can’t always keep up with demand, especially when your business is growing.

That’s when it’s time to look at HR Outsourcing solutions.

What is HR outsourcing?

Human resources outsourcing happens when a company hires external consultants to manage some of its HR functions. This can range from day-to-day HR admin to large-scale strategy. HR outsourcing might also focus on a particular HR function, like recruitment. An outsourcing engagement can be temporary, full-time, or project-based.

Your HR outsourcing consultant can offer full-service support or partner with your in-house HR team. They can also provide support and training to your internal HR department, which helps them deliver more for your organization in the long run.

Download my guide to HR outsourcing

Which HR functions can you outsource?

The simple answer is: all of your HR tasks can be outsourced. If you chat with an HR outsourcing services company, they’ll discuss your current business needs and help you identify the right solution for you.

In general, an HR outsourcing agreement will usually falls into one of these categories:

  • Foundational HR: Day-to-day HR support, much like hiring an HR admin. Foundational HR outsourcing can help with time-consuming administrative tasks like scheduling interviews, background checks, onboarding new hires, benefits administration, dealing with employee queries, and compliance paperwork.

  • Operational HR: Operational HR focuses on HR management tasks. This can include employee relations, performance management, engagement and retention, implementing policies, updating the employee handbook, regulatory compliance, and optimizing HR technology.

  • Strategic HR: Strategic HR works on a C-suite level, offering high-level support for planning your HR needs. A strategic HR consultant will help with HR alignment, risk management, employer branding, leadership development, and workforce planning. They can also develop and implement major HR policies like your DE&I strategy.

  • Recruitment Process Outsourcing (RPO) and Retained Search: Some HR consultants focus entirely on your staffing process. RPO consultants will help with talent acquisition and managing the candidate experience. Retained Search consultants focus on filling strategically important positions, such as finding a new CFO or CEO. They oversee the hiring process end-to-end until the right person is in place.

An outsourcing firm such as Helios HR will have a diverse team of experts that can help in different scenarios. That’s why the first step in HR outsourcing is to talk to a service provider about your business needs and then see if they have the right consultant for you.

Can outsourced HR improve the employee experience?

HR outsourcing companies can help in an emergency, such as when your senior HR leader suddenly quits. At times like these, an HR consultant can lend a vital hand and keep things running smoothly.

But can HR outsourcing actually improve the overall employee experience?

The answer is: yes. Here are a few things the best HR outsourcing services can do to add real value to your organization.

1. Remove HR bottlenecks

Bottlenecks are the biggest problem with in-house HR teams. The team has limited capacity, and they can get overwhelmed during busy times, such as benefit enrolment or when there are major policy changes. Employees then get frustrated because they can’t get the HR support they need.

HR outsourcing gives your in-house team the additional support they need to cope with demand surges. This means a better experience for everyone: employers get answers when they need them, candidates have a more streamlined experience, and leaders know they can always count on HR support.

2. Be an unbiased voice in the company

In-house HR staff can form strong relationships with other people in the organization. Those relationships are a positive thing, helping to build that sense of trust that’s so important in HR. But it can also raise some questions about objectivity. Can employees trust a HR rep that’s very close to management? Can management rely on an HRO to take an objective view of operational matters?

HR consultants have the advantage of being completely impartial, with no loyalties or biases that might impact their judgment. This can be especially useful in delicate situations like Reduction In Force exercises, DE&I audits, and compliance reviews. An outside HR expert can also assess the current HR team and flag up any areas that need improvement.

3. Allow for fast scaling up

Growth is the goal of every business—but rapid expansion can lead to growing pains. For example, if your business opens a new location, you must staff it from the ground up. This means a massive recruitment drive, plus a mountain of HR admin tasks, including onboarding new employees, employee benefits enrolment, company culture integration, and payroll administration. It may stretch your current HR team beyond breaking point.

Outsourced HR solutions allow you to scale up quickly. You can bring in skilled HR or RPO consultants on a project basis, and they will work with you until the mission is complete. Your current HR team won’t be pushed too far, plus they can still have time for day-to-day employee queries, like questions about health insurance or retirement plans. When your consultant has delivered your target, you can choose to scale down or end your contract with your outsourced HR staff according to your business needs.

4. Bring in fresh ideas

Consultant HR experts have a fresh perspective and a diverse background, which means that they can provide tons of new ideas. Even if you’re outsourcing simple HR administration tasks, your consultant will be able to tell you about the best practices that work for other companies.

Strategic HR consultants have extensive knowledge of how things are done elsewhere. Consultants often have experience in your industry, so they can tell you what works, and what doesn’t, and advice on the best way to navigate issues such as compliance and HR software. The result is a fresh approach to human resource management that will make life easier for all your organization's managers and staff.

5. Develop your in-house team

External HR experts can help you redesign your key HR processes from the ground up. Using their knowledge of industry best practices, they can help create an optimal approach for everything from recruitment to payroll.

Best of all, they can pass their knowledge on to your full-time HR employees. This is not only a long-term benefit for the company but also an excellent professional development opportunity for your HR employees—who are employees too!

Need help with HR?

HR outsourcing can be a game changer for every company, from small businesses to multinationals. Working with a trusted HR outsourcing partner means that you always have the support you need when you need it.

Want to explore your HR outsourcing options? Talk to an experienced consultant today, and let’s see how we can grow your team.

Learn more about recruitment process outsourcing services