Today more than ever, small businesses operate on a tightrope. They pay for only the essentials to keep cash flow secure, and leaders often wear many hats to keep payroll lean. There’s nothing wrong with this approach—bootstrapping your way to success through hard work, and stringent discipline has worked for many companies! Just make sure you’re not skimping on the things that will enable growth, like outsourced HR.
Many small companies don’t see the need for HR. There are only a handful of employees who all appear to get along—what’s the point? Contrary to common belief, your HR department isn’t all about hiring and firing. A strong HR core lays the groundwork for business growth in many ways, and outsourcing is often the most cost-effective means for budding businesses to take advantage of these benefits. Here’s why outsourced HR makes sense.
1. Better employee retention
Did you know the average financial loss of an hourly employee to a company is $1,500, and 1.5%– 2% for a salaried employee? How many employees have you lost in the last twelve months that you can't explain? Each loss is a direct impact on your bottom line, making employee retention a priority.
Employee retention is a function of HR and a conduit between leadership and employee. More than just hiring and firing, an outsourced HR solution gives your employees the experience they expect, like benefits administration and conflict mediation resulting in a more secure outlook for their career with your company. Peace of mind, especially in our current environment, priceless.
2. Better recruiting and talent acquisition
Just because you run a business doesn’t mean you’re a good talent evaluator—or that you have time to search for and hire quality talent. Leave it to HR! Growing businesses need to add the right team members quickly and effectively, to shoulder the burden of responsibility, and foster growth. Outsourcing HR will pay dividends in the form of new hires who are properly aligned and equipped to help your business succeed.
3. Growth opportunities by focusing on operations
There’s a reason large companies have an HR department—it’s more than a full-time job for any single person! Small business owners can’t add “HR Generalist” to the hats they’re already wearing. Leaving HR and its many duties to an outsourced partner can free up time and energy for business owners to focus on what matters: growth opportunities for their business, less stress, and more balance.
4. Creation of SOPs and workplace standards
Order, process, and organization are prerequisites for growth and success. You can’t expect to scale your business if you have no scalable processes in-place! HR is where these resources are created and where workplace standards come to fruition. Outsourcing HR can lay the groundwork for standard operating procedures (SOPs) that enable growth. This is also how you keep your business mission-focused and everyone happy and productive.
5. Benefits administration
Benefits administration is a benefit all by itself—mostly because it’s so important! Benefits are a big part of the reason employees choose to work for small companies (instead of higher pay). You need to know your way around everything from health plans, to retirement plans, to stock options, and more. Leave it to HR to qualify, explain, manage, and execute on these benefits, so employees can realize them as a portion of the total sum of their compensation.
6. Cost control
All of these points add up to a smart decision: outsourced HR. The best part is, outsourcing HR costs next to nothing for small businesses. It might actually cost you more not to hire an HR partner - so why try and accomplish everything all by yourself?
Based on resources from payscale.com and Glassdoor, an HR Specialist earns, on average, $60,000, and an HR Director makes just over $82,000 annually.
Outsourced HR services cost an average of $500-$700 per month. If Outsourced HR can improve your bottom line, reduce turnover by just one person, and improve your productivity, the net cost to you – ZERO.
At Employee Solutions Group, people, productivity, and profitability are what we do best. As your HR partner, we work diligently to understand and actively engage in your goals and objectives to build a successful business. Call to schedule a consult at (630) 888-7144 or email at email@example.com
To learn more go to www.employeesolutionsgroup.com