Startups: When is the Best Time to Start Outsourcing HR

September 1, 2018

When you start a business, you are the chief cook and bottle washer, the CEO and the mailroom guy. As your business grows, however, you will come to a point where you simply can’t do everything by yourself. You’ll need someone to make sure the bills are paid and the payments are collected. You’ll need someone to answer the phones, someone to find more business, and someone to maintain that business. And after all that, you’ll still need someone to take care of all those people.

It’s often tempting to think that you can handle any HR duties required; it’s your business, after all. And you’re right: you can probably handle the HR functions for your business – for a while, at least.

But HR people wear a lot of hats. They are recruiters, payroll specialists, benefits administrators, and employee relations experts. They write policies and procedures, and they interpret laws. They bring associates on board, approving promotions and completing terminations. Sometimes they do all these things on the same day – and often, they are doing two or more at once.

Of course, modern technology can make many of these duties easier to handle. You can automate a lot of processes and administrative tasks with the right HR software, but you still need human action. How do you know when it’s time to take a step back and let someone else worry about HR and payroll?

When you’re spending more time on HR than bringing in business

The biggest clue that you need someone to handle the HR role is when you find yourself spending more time fulfilling your HR responsibilities than building your business. Human Resources involves the care and development of the people who make up your business. A business, after all, is made up of people and not just customers. These people deserve time and energy, but if you find that you or your partners are spending more time on your people than on the business itself, it’s time to take a step back and let an expert take over.

When your people begin expressing frustration

Nothing is more counter-productive than worrying about processes that should already be in working order. If your people are wondering whether their paychecks will be on time and accurate, they are less focused on helping build your company. If this is the case, it’s time to get help with your payroll administration before it becomes a drag on your business.

When retention or recruiting becomes a problem

Small companies have a lot of advantages – your company can move quickly to meet business demands – but being small can also result in difficulty attracting and retaining employees, especially if your compensation and/or benefits packages aren’t strong. Outsourcing HR helps you find the best new talent and can help you tune up your benefits and compensation packages to retain it.

When you start worrying about liability

Laws and regulations change often and they don’t always make headlines. If you find yourself worrying about your legal exposure for not keeping up with changes in compliance, you may need help finding and meeting those requirements. Save yourself the headaches and lost sleep worrying over things that might have been missed.

Outsourcing HR can take the liability off your company. If you’re looking for an example, look no further than the chaos surrounding health benefits. Now more than ever, laws and regulations governing health benefits are confusing and contradictory at both the state and the federal level – and it doesn’t look to be resolved any time soon. As an employer, you’re still bound by the law even while it’s being fought over in court. This is why it’s smart to have a partnership with an HR expert.

When you want to save money

Everybody knows that Human Resources administration costs money, but when HR is managed optimally, it can also save money. Good HR saves money by limiting fines and fees for not meeting laws, by cutting the costs of employee retention, and by finding savings for benefits. Even more importantly, it can give you peace of mind and allow your company to truly thrive.

For more information on how Commonwealth Payroll & HR can work with you on your strategic human resources planning, call us today at 877-245-1159.

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