5 Reasons to Consider HR Outsourcing in 2021

Updated: Jan 8

Dealing with every business practice in-house can be an exhausting task, especially with a small team. There's only so much one employee can concentrate on, and trying to push too much responsibility can lead to a decrease in performance and morale.


To combat this, many companies have started outsourcing administrative responsibilities they would normally do on their own, with many of these responsibilities existing within the human resources (HR) department. HR outsourcing organizations (HROs) are a top resource when it comes to getting help.


So how exactly does outsourcing HR-related tasks help your business? Find out more below!


1. Peace of Protection

Compliance became even more overwhelming in 2020, as new pandemic-related legislation was introduced to business owners. Being comprised of HR and employment law professionals, HROs can help navigate these laws and regulations that can often be difficult for non-legal professionals to understand.


Mistakes and legal fees can be expensive, with some costing tens of thousands of dollars on average. Business owners can rely on their HRO partner to keep them up-to-date with new and changing laws, while also providing suggestions for improving policies and procedures to help avoid potential difficulties.


2. Better For Remote Work

As the COVID-19 pandemic continues to surge across the world, a growing number of businesses are resuming their remote operations into 2021. Some management teams are not accustomed to this kind of work environment, however, and may need assistance.


HROs can assist with this continued transition by providing general guidance and support, along with digital trainings and resources for employees. They can also help navigate stressful situations that employees may encounter while working from home, along with updates on COVID-related legislation being implemented.


Looking to grow your organization from the home office? An HRO can also assist with a virtual hiring process, while also setting up remote onboarding and trainings for new employees.


3. Enhanced Productivity

With the support of an HRO partner, business owners and managers can spend less time worrying about forms, trainings, disputes, and more.


With a simplified schedule, management can instead put more time into enhancing internal communications, boosting retention efforts, updating hiring practices, improving remote and office working conditions, and other factors that can boost productivity.


Not only do HROs assist with HR, but they also provide services related to payroll, benefits administration, and risk management that can create even more efficiencies.


4. Cost Savings

Outsourcing HR can save businesses money in the long run. HRO clients are able to save on a multitude of business expenses, including administrative costs (around $450 lower per employee), perks and benefits, unemployment insurance (UI), and more.


The hiring and retention services provided by an HRO can also reduce expenses related to employee turnover. And speaking of personnel, many business owners decide not to hire or maintain an internal HR and payroll team while partnering with an HRO, thus saving additional resources.


5. Increased Growth and Profitability

Last, but certainly not least, many business owners have reported an increase in growth, revenue, and profitability when partnering with an HRO.


With many businesses having struggled throughout 2020, these helpful resources may be able to assist in a 2021 comeback.


Per the National Association of Professional Employer Organizations (NAPEO), the expected annual median revenue growth for HR outsourcing clients was once reported to have been 40% greater than that of similar businesses. They also reported that those utilizing HROs were 16% more likely to report an increase in profitability.


Are You Ready to Outsource HR?

With these five reasons to consider outsourcing HR, you might be thinking of making the switch for your business. To learn more about the process of switching to an HRO, or to gain further insight on these organizations, feel free to reach out to us today!


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