Human resources departments deal with benefits administration, health insurance, workers’ compensation and discrimination and harassment issues. But a major part of human resources (HR) has always been staffing. This includes a great deal of behind-the-scenes work such as:
- Placing classified ads
- Performing reference checks
- Performing background checks
- Writing letters of hire
- Organizing and presenting at new-employee orientations
- Writing job descriptions
- Writing and maintaining an employee handbook
Those responsibilities involve a number of skills, including doing research, writing effectively, organizing events, and presenting in front of a group. It is rare for a small business to maintain an HR staff — let alone one employee — who has all these abilities.
Along with information technology, telecommunications and building maintenance, human relations are among the most common business segments being outsourced. The theory is that letting outsiders manage these necessary but diversionary processes frees a business to devote its resources to core products and services.
Further, human resources (HR) has become so complicated, proponents of outsourcing say, that it takes a team of specialists to keep tabs on all the administrative, compliance and legal issues related to staffing, payroll, workers’ compensation, benefits, health insurance and other areas.
While you certainly should consider cost-effectiveness in deciding whether to outsource your HR, there also is an intangible: Your HR department may be the most visible form of “the company” to your employees. An HR department should effectively serve your employees in a way that makes them feel good about working for you.
If you are thinking about outsourcing your HR, you should consider the following:
- Is the cost of outsourcing worth the benefit?
- Is there an agency in your area that’s familiar with your industry?
- Does the agency have adequately trained staff?
- Where does your business fit in on the agency’s priority list?
- Will the agency allow you to retain your benefits administrators or will it insist on new ones?
- Does the agency have a flexible or a one-size-fits-all approach?
- Are there any red flags?
Yes, you certainly can do it yourself. And chances are, that's what you're already doing. Unless you've already engaged an HR outsourcing firm, you are managing your Human Resources internally.
The question is, did you consciously make this decision, or did you simply take on your HR responsibilities? Depending upon your business and your interest in dealing with HR administrivia, you may want to consider the outsourcing option.
Regardless, registered SBI users can access a number of HR links, documents, worksheets, and other tools in the Resource Center. If you're an HR 'do it yourselfer' you will want to take advantage of these no-cost tools available exclusively to SBI members.