No one wants Human Resources (HR) but everyone wants what HR does. Sound familiar?
62% of business owners think they can “do HR” and 64% of them reach out for HR help once they figure out they can’t do it alone—or once they get sued by an employee for wrongful dismissal.
You know better
Many experts will tell you that the number of employees in a company is the determining factor for HR needs. A lot of companies with under 20 total employees assume that they don’t need any HR expertise. But size isn’t the only issue to think about. Other considerations include:
- The scope of HR services needed
- Whether requirements are limited to transactional services
- How strategic and innovative you want your business to be
- How important ROI is relevant to your people
HR is mandatory
In reality, HR functions must be conducted for every company—no matter how small or large. So properly framed, the question to ask is: “What is the most effective way that HR services can be delivered by your company?”
Is it better to have an in-house HR department doing the job? Or is it better to partner with outside HR experts, using a variety of vendors or even a single source? For example, many organizations find that it’s more convenient and cost effective, to outsource transactional services such as payroll, tax, and benefits administration, while partnering with a strategic HR partner to deliver high value consultation.
It isn’t just company size that determines which HR approach is best
Whether or not a company needs an HR department also depends on its business category and the competitive challenges it faces. Say you’re a relatively new, rapidly growing firm offering professional services. You need to quickly onboard highly specialized talent and you can’t afford to waste time by hiring the wrong person. You’re likely to outsource recruiting services in such a situation.
Perhaps you’ve been around for a few years. However, you’re experiencing a high turnover rate, which is inevitably affecting your productivity, customer service, employee morale and branding (just to name a few). In this scenario, you definitely need HR consulting to help you get to the root cause of the problems and develop strategies that will prevent your employees from leaving.
Are you a leading-edge entrepreneur?
Beyond employee benefits and payroll, ask yourself if your company needs a more comprehensive range of transactional and strategic HR services. Today, many leading-edge entrepreneurs realize that a peak-performing, strategically-focused HR operation can generate both savings and profits for the businesses they serve.
Understanding the benefits of strategic HR will help guide you in determining whether in-house HR, outsourced HR, or a combination of the two best suits your business’ human resources needs.