4 Reasons Your Start-Up Should Outsource HR

Even an entrepreneur, you will need to hire employees to help manage the daily operations of your business. This requires offering competitive pay, meeting tax requirements, and complying with state and federal employment laws.

There are many more ways that managing human resources issues will require full-time attention. Rather than creating an HR department in your own organization, there are several reasons to outsource those needs to a third-party company.

Reduce Operating Costs

Possibly the most desirable benefit of outsourcing your human resources needs to a third-party company is that it will cut operating costs significantly. Maintaining your own HR department means hiring employees to fill those positions, requiring you to pay for additional salaries and benefits. Those employees will also need office space, computers, and furnishings. All of these things take up space and cost money, increasing your operating budget. As an entrepreneur with a very tight budget, you need to limit spending as much as possible.

Conversely, outsourcing to an HR company eliminates your need for those extra employees and extra expenses. When you outsource your HR needs, you can operate with smaller office space and without having to supply more furnishings and equipment. Your office also will use fewer resources with less people, which means monthly utility costs will also be lessened. Instead of the higher cost of operation, you’ll pay a smaller fee to the third-party service, and all of your needs will be met.

Rely on Highly Skilled HR Professionals

Companies that offer HR services focus solely on that area of business management, so they ensure the people they hire have the education and experience necessary to fill those roles. Additionally, they make sure their employees are kept up to date on changes to tax laws and other regulations that are necessary to know in order to process payroll, taxes, and to perform other services [source].

This gives you the peace of mind in knowing that you’re getting the best possible quality of service. When you promote your own employees into HR positions, they won’t have that same level of skills and knowledge.

Spend More Time on Productive Tasks

While HR services are necessary to the operation of your business, those tasks aren’t productive in contributing to the growth of your business. However, when you outsource to a third-party company, you can reassign your employees to more productive tasks.

Staff members who would ordinarily perform HR tasks can assist in special projects that do contribute to the growth of your business. This ensures the higher cost of paying salaries and benefits won’t be wasted on unproductive tasks.

Enjoy a Legal Buffer

The third-party service you hire to provide your HR services will take on the liability associated with performing those tasks. This means they’re responsible for ensuring employment laws are followed, taxes are properly deducted and paid, other compliance issues are met (source: NetPEO). This removes some liability from you as the employer or business owner and places it on the HR company providing those services.

As the liable party, they will take the extra steps necessary to ensure every task is done properly within the legal guidelines. This provides you with a layer of protection in the event that there is an issue with an employment law violation or improper tax reporting. Although errors of these types are especially rare with HR companies, they will also have response procedures for dealing with them that will ensure you are protected from their errors. Once you experience the benefits that outsourcing your HR needs provides, you’ll see why more and more businesses are considering this option. Particularly for an entrepreneur who has limited time and money, using a third-party service can help you focus on the more productive aspects of managing your business.

About the Author:

Mary Aderholt is a blog-master and journalist with a fierce passion for writing. She has been editing articles for various US based news-papers whilst contributing to the growth of many personal or organizational blogs for 10 years now. She is well accustomed to writing online as well as offline articles covering almost any type of subjects, be it health, beauty, sports or pretty much anything else-related.


TBN Editor

Time Business News Editor Team