Written by Simon Morgan, HR Dept South East London and North Kent
In 2015, 84% of SMEs outsourced all or part of their HR function (source: CIPD HR Outlook). Given the uncertainty around the impact of Brexit on employment law, particularly the position of EU workers, it’s highly likely that even more firms will look for external HR expertise to help them navigate the anticipated changes over the coming years.
Access to external expertise is just one benefit of outsourcing HR – there are many other reasons why it may be worth considering for your own firm.
1. Reduces costs
If you have employees, you need a Human Resources function to recruit them, train them and pay them at the very least. But as essential as HR is to your firm, it’s a non-revenue generating function, and the cost of maintaining it can be significant – salaries, office space, technology, etc. An outsourced HR provider can split many of these costs across multiple clients, meaning that a high level of service can be provided to your firm at a lower cost.
2. Provides access to latest technology
Related to the cost point above, a dedicated Human Resources provider will have access to the latest and best tools and technology, meaning that your own firm will be able to benefit from them without being responsible for the capital outlay.
3. Allows you to focus on your core competencies
In SMEs in particular, the management team can be stretched very thin, with individual members given oversight of functions that aren’t necessarily their areas of expertise. Outsourcing your HR function will free up your senior staff to concentrate on the areas they do excel in, and that add most value to your business.
4. Reduces risk
Using an outsourced HR provider allows you to scale up and down resource (and therefore financial commitments) more efficiently. In challenging times, you can quite easily reduce the amount of support that you buy in, avoiding redundancies, and conversely when you need more HR help, you can obtain it far more quickly from an external provider than through a conventional recruitment process.