HR Outsourcing: Why Small Businesses Must Use HRO Services in 2020

Laura Poynter BSBA-HRM

Human resource departments have many important duties in an organization. It deals with recruitment, training, management, payroll and taxes of employees. 

Unfortunately, for small and medium sized businesses, it’s quite challenging to create and maintain a HR department of their own. It takes a lot of money and time which could be spent better on growing the business.

Oftentimes, small and medium businesses neither have the budget nor the capability of creating their own HR department. A professional and experienced HR outsourcing service is therefore the best solution for such businesses to handle their HR related needs.

Outsourcing HR cost a lot less than creating your own 

It’s important for small businesses to keep their expenses as low as possible and generate more profit in order to survive in the market and HR outsourcing can help them do just that. 

Hiring a professional full time HR manager costs a lot of money, while HR outsourcing services could provide businesses the same or even better service for a very small amount.

On average, HR outsourcing costs anywhere from between $50-$1500 per month depending upon the number of employees and services used. However, hiring a full-time HR manager would easily cost double or even more than that.

Outsourcing HR service saves time

HR services are crucial for any business but it’s a burden. Managing all the services like recruitment, training, conflict resolution, payroll & taxes management etc. takes a lot of time. Time that you could be spending working on your business. 

Outsourcing firms do a better job of HR management

HR outsourcing firms have professional and experienced staff. If you personally hire a full time HR manager they’ll learn and gain experience over time while HR outsourcing firm’s employees are already trained.

These firms have years of experience in managing HR related services and it is their job to know all state and federal laws & regulations, they understand how to manage employees & their data, they know how to handle taxes, etc. and therefore they provide better service than a full time personal HR manager could.

Conclusion 

HR duties are crucial but a burden for small and medium sized businesses. They take a lot of time and resources and are not directly related to business objectives.

Small businesses could do a lot better by using HR outsourcing services. Such services do a much better job of HR management and cost far less than a full time HR manager thus they save a lot of time and money for businesses.