A business is only as good as the people who power it. Your human resources (HR) strategy can make or break your business, whether it is a startup, established and growing, or mature company. Many companies are investing a great deal of time and money into building out internal HR departments. However, this approach can be costly, and there may be a better path forward.
There are so many responsibilities to manage within HR — insurance, payroll, talent acquisition, benefits, and more — each of which require different skill sets. With the limited resources of most small to mid-sized businesses (SMBs), it is hard to justify putting a team of true experts on your payroll.
The solution? Outsource your HR.
A 2017 study
released by NAPEO (National Association of Professional Employer Organizations) revealed that businesses that outsourced their HR achieved twice the growth in annual revenue as compared to those that did not. Here is a summary of three major advantages:
- Get a team of experts for less
The most significant cost advantage of outsourcing HR is that you can leverage the expertise of a team of HR pros, who have a full spectrum of HR skill sets, for much less than the cost of an internal full-time team. A talented HR manager can often cost around $80,000 per year in salary, especially in a major market such as Chicago. Data from the U.S. Bureau of Labor Statistics
shows that in 2016, the average pay for HR managers with five or more years of experience was $107,000. Outsourcing your HR to an experienced team could save you 50-70%.
- Receive more value from your employee benefits and total rewards
Benefits are just one aspect that an HR department must manage. Especially for an SMB, an internal HR person may not have the necessary experience in finding cost-effective and business-minded employee benefits solutions. By outsourcing HR, you may also have more buying power to access Fortune 500 level benefits. You’ll also get the support of a team of subject matter experts who excel in building and negotiating plans that will help you attract and retain your top talent.
As state and federal employment regulations expand and multiply, it has become increasingly difficult for employers to stay up-to-date. This can lead to costly consequences, such as fines or even legal fees and other damages from being sued by current and former employees. Some of the compliance issues that cause the highest financial impact include wage and hour labor laws, Federal Medical Leave Act (FMLA) administration, and wrongful termination. An outsourced HR partner can help you avoid these costs and potentially lethal setbacks by keeping you compliant.
As a business owner and leader, you already know that people truly are the most important asset of your organization. Managing them well, and ensuring compliance with all those laws, takes somebody’s time. The question is whether all of that time needs to be yours. With the help of an outsourced HR partner, SMBs can help make their workforce more productive (and happier!), which translates to greater success for both the business and its community.
To learn more about EmPower HR, visit www.empowerhr.com or call us at 888.818.0707.