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When and How to Outsource Human Resources

The bigger your company gets, the more complicated, time-consuming, and stressful your Human Resources (HR) responsibilities can be. It might be time to outsource some or all of your HR to a dedicated professional. When to outsource HR depends on various factors, including the size of the company, the complexity of HR responsibilities, the specific HR needs, and the capacity and knowledge of the internal employees handling HR. While there is no fixed number of employees that dictates when to outsource HR, here are some general guidelines and scenarios:

Small Businesses (1-49 employees): In the early stages of a small business, the owner or a few key employees might handle basic HR tasks like recruitment, onboarding, and employee relations. As the company grows, the HR issues list grows. The longer the list of HR issues is, the higher the risk there is of claims, accusations, lawsuits, turnover, conflict, poor performance, etc.

Once the list reaches a point where the company no longer has time, desire, or expertise in handling it internally, they should outsource HR via TalentSENSE to keep employees positively engaged and high performing and the company out of legal trouble. In addition, outsourcing can be cost-effective. It allows you to access HR expertise without the burden of hiring dedicated HR staff.

Medium-Sized Businesses (50-499 employees): As the company continues to grow, the HR demands become more complex, such as FMLA. At this stage, it's common for businesses to have at least one HR professional (outsourced or internal) or a small HR team to handle various HR functions, including employee relations, benefits administration, training, and compliance.

HR Department of One: Either scenario above can be outsourced to TalentSENSE, but the bigger the company grows, it’s best to have at least one full-time HR person internally. However, a solo HR practitioner is often pulled in so many directions they need a reliable partner to get the job done right, and outsourcing some of the responsibilities is a great solution. Or if the company has a less experienced HR person internally, TalentSENSE can provide support and/or management of that person to ensure the company has the right expertise within HR.

Large Enterprises (500+ employees): Larger organizations typically have a well-established HR department with multiple HR specialists and managers. In such cases, the HR department may be organized into different teams: recruitment, compensation and benefits, talent development, employee relations, and compliance.

These departments are typically all internal, but if there is a leave of absence or a temporary turnover issue within HR, TalentSENSE can help. If the company is experiencing rapid growth or facing downsizing, outsourcing HR allows for flexibility in managing workforce changes without needing constant adjustments to the HR team size.

Project-based: There is also another scenario when a company should outsource HR: pesky projects. Often companies with or without internal HR have projects that seem to never start due to other priorities, capacity, desire, or expertise. These projects include employee handbooks, employee file audits, compensation reviews, job description updates, performance review processes, and more. The best and sometimes the only way to get them completed is to outsource HR projects to TalentSENSE.

Most importantly, outsourcing HR enables organizations to focus on their core business activities, achieve business goals, reduce stress, and gain time back, while leaving HR-related tasks to the experts.

Interested in learning how you can reduce stress and have some relief? Click HERE to schedule a free HR Consultation.


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