Business

6 Signs It’s Time to Outsource Your HR 

One of the most exciting parts of building a company is growing your team. But with each new team member come myriad tasks related to human resources. Between onboarding paperwork, benefits, legal compliance, and payroll, you’ve got a lot added to your plate. 

With so much to juggle already, these added responsibilities could turn into a bottleneck, hindering your organization’s growth. Outsourcing some key HR duties can help your organization run more efficiently. 

Not sure whether delegating HR tasks is right for your company? Read on to discover six signs it’s time to outsource your HR. 

1. You Need to Save Money

When you’re a small company, every dollar matters. Choosing to hire in-house HR professionals is expensive. This means you have to cut back on other business essentials, like your marketing budget or product improvements. Save money for the things that matter most when you’re growing a company by using a professional employer organization instead. 

What is a PEO? Think of it as your outsourced human resources partner. PEOs handle a variety of HR responsibilities, including payroll, benefits administration, taxes, and labor law compliance. Leaning on a PEO to do many of your HR tasks means you may not need to hire in-house HR professionals for a while. This lets your company spend money on the things that will have the biggest impact on your growth.

2. You’re Ready to Scale Your Company 

When you scale your company, you’ll be faced with a new set of challenges you didn’t have when your organization was small. The more employees you add, the more training and oversight are needed to keep your business running smoothly. You’ll also need a standardized onboarding process to ensure every new hire has filled out the necessary documents to begin working. 

Working with a PEO can help companies scale faster than if they were to keep all HR duties in-house. According to the National Association of Professional Employer Organizations, businesses that work with a PEO scale 7%-9% faster than those that don’t. PEOs help to optimize HR tasks, ensuring that all employees are happily and legally employed. This gives company leaders back time to focus on business strategy. 

3. You Need to Save Time 

Speaking of time, it’s no secret that business owners wear a multitude of hats. To run a successful organization, you have to juggle all the responsibilities that go with managing a team. You also have to make time to focus on the product or service you crafted your business around. Tackling HR tasks like payroll and benefits requires additional hours that business leaders simply don’t have. 

Working with a PEO relieves you of many of the employment-related duties that come with growing your team. This keeps you from staying after hours to calculate overtime and take care of payroll taxes. Your PEO will handle the nuances of employment administration so you don’t have to. 

4. You Want to Hire International Remote Workers 

You found the perfect product designer for your team. They have years of experience and are excited to work with your organization. The only problem is that they live in France. 

It would be great if it were easy to hire the best talent for your organization, regardless of where they live. However, the complexities that accompany payroll and labor law compliance across borders can make it challenging to hire abroad. 

Companies that want to hire international remote workers need to work with an employment solution. If you don’t have a business presence in another country and don’t wish to establish one, you can work with an employer of record. EORs employ workers from other countries on your behalf, handling all the legalities. While the EOR may be the employer on paper, your business still benefits from the skills and expertise of your newly onboarded talent. 

5. You Struggle to Respond to Change Quickly 

When change occurs, companies must act quickly. During COVID-19, the entire world transformed the way it functioned, putting added strain on organizations. Companies that were adaptable thrived, while those that weren’t went out of business. In the midst of the COVID-19 chaos came the Great Resignation. This flipped the power dynamic in the job market, making it harder to attract skilled workers. 

If your HR team is bogged down with payroll and compliance documentation, high-value work like hiring gets left for later. This makes it harder to respond quickly to the hiring needs that come with change. Outsourcing some HR tasks allows your business to stay flexible and respond quickly to new hiring needs. 

6. You Want to Ensure That You’re Compliant With Labor Laws

Is your company filing the proper paperwork to ensure all of your workers are correctly classified? Misclassifying employees can lead to some serious consequences, including regulatory fines, business penalties, and legal disputes. If you’re not sure whether or not your workers are classified correctly, it’s a good idea to get outside help. 

PEOs don’t typically offer auditing services to double-check worker classification. However, they will ensure all of your paperwork is filed correctly, which is half the battle. If you’re unsure how to classify an employee, consult with an employment attorney rather than relying on guesswork.

Growing your team is exciting, but the accompanying HR tasks will cost you time and your company money. Consider outsourcing your HR to focus on what matters most and start scaling your organization. 

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