4 Reasons why Small Businesses Should Outsource their HR

Before explaining the benefits of outsourcing your HR, it is important to make clear what HR actually is and what HR actually do. For me, there are two sides to HR – that is the legal compliance side, and the business success/ growth side.

The legal compliance side consists of ensuring all contracts, policies and practices are in alignment with UK employment law. This will reduce the risk of finding your business being called to an employment tribunal or calculating a hefty settlement agreement.

The business success/ growth side is more about ensuring that you have the highest performing team supporting your business. This will include dealing with poor performance, behaviour, absence and capability, as well as working on employee development, training, recruitment and engagement.

Both sides are equally as important and specialist enough to warrant outsourcing your HR. Read on to find out why.

Save Time

As a business owner myself, I know that business owners take on too much and try to do everything themselves. But the harsh truth is, we can’t do everything and we often come to this realisation when it’s too late. As much as we may try, it simply is not possible for most business owners to run their business, produce engaging content, bring in new customers, develop their services, manage their accounts, grow their business and manage their employees on top of everything else.

Have you ever heard the phrase Jack of all trades, master of none? Well this is what can happen if, as a business owner, you try to take on too much. Inevitably, you will try to educate yourself on the basics of everything but time won’t allow you to perfect every area of business and you’ll fall short.  

When it comes to HR specifically, I have seen so many times that business owners try to do their own HR, but due to time restraints do not give it the time and attention it needs. As such, performance reviews get pushed back and behaviour/ performance suffers. Employee attendance gets overlooked and before you know it, you’re cancelling customers because you have an unreliable employee. Contracts and policies become out of date, and that’s if they were ever actually written in the first place. These are all crucial parts of running a successful business, amongst so many others that get sacrificed in the attempt to do it all.

Outsourcing your HR will take this take away from you and give it to the experts to free p your precious time.

Reduce Risk

With poor policies, practices and employees comes risk. Risk of getting it wrong and finding yourself in settlement negotiations or tribunal. No matter how well-intentioned a decision may be, if it directly, indirectly, intentionally, unintentionally discriminates, you could face unlimited compensatory fines. If you get rid of that problem employee, but didn’t follow a correct process, you might find yourself facing an unfair dismissal claim. And then there’s the reputational damage that comes with this.

However, the risk I’m referring to is not JUST legal risk. When you ‘wing it’ with your HR practices, you risk your businesses growth, success and future. Your people are your biggest asset. You can’t grow, and you’ll struggle to even sustain without them. But only if you have the right people, in the right places. With effective HR support, you can nurture your employees, developing them to their full potential and future-proof your business. With HR support you can create an engaged, proactive, present and high-performing team for your business and reduce the risk of your employees become a drain on your company’s profit, reputation and growth.

When your team are performing to their optimum potential, the return on investment they bring back into your business from the money you pay them each month will far cover the cost of their wage and outsourcing your HR.

Reduce Stress

Think about it, with your limited time combined with the risk of getting things wrong, you are inevitably going to feel stressed when dealing with any employee issues, even those good-natured queries that you simply do not know how to respond to. 

Trust me, the stress of not knowing how to handle a risky scenario that has arisen or a sensitive question that you don’t know how to safely respond to, and the thought of getting it wrong is not worth it. Your energy could be much better placed elsewhere in your business.

Having a HR consultant to hand to support you with any questions and share the responsibility of important decisions with you, will ease that stress immediately. Imagine knowing that you can respond to any employee issue with “I’ll just check with our HR and get back to you.”

Access to Expert knowledge

Now this links all 3 of the already mentioned points. HR professionals spend years training and even more years putting that knowledge into practice. Good HR professionals are committed to continued professional development which is vital in the ever changing world of employment law. We stay up to date with tribunal cases and outcomes so we understand how judges interpret employment law as lots of employment law is about what’s ‘reasonable’ or ‘legitimate’ which is entirely down to interpretation. The key here is that HR professionals know the law, they know how it works in practice and they are far better informed to make those murky judgements.

And then on the flip side, HR is not just about the legal side but we are trained in the latest and most effective techniques for employee development, absence management, growing your workforce, improving performance, engaging employees and overall improving the efficiency or your teams.

To summarise, outsourcing your HR will save you time, stress and risk whilst working in partnership with you and your business to ensure it is maximising it’s profit and performance without any compensatory fines or settlement agreements.

Often, the importance of HR practices can be overlooked as the more old fashioned ‘personnel’ function that does little more than to keep employees happy. But HR is so much more than that! It is a vital business function which without, can really stunt business reputation, growth and success.

Don’t be the client that waits until they have a problem to seek HR support, get in touch today via megan@yourhrhandled to see how we can support you to save you time, reduce risk and stress and develop your employees to be the best they can be for your business.