If you are a small business owner with more than one employee, then you know that as soon as you make that first hire things can get complicated. From training to compliance, growing your business by adding employees means taking on more responsibilities. That’s probably why outsourcing HR is so popular, particularly with small businesses.
Business owners with limited time and resources use outsourcing so they can focus their attention on growing their companies. That’s just one of the reasons listed by Nolan Gray in his article at Jobscience, 6 Top Reasons for Outsourcing Human Resources Functions.
Calling on a company focused on all the new federal and state employment laws also enables a small business to stay compliant, thus avoiding fines, penalties, even lawsuits. As Megan Totka points out in her article for Forbes, Benefits of HR Outsourcing: How Even Small Businesses Can Provide Great HR, “The regulatory environment is complicated and ever changing.”
Is it ever!
There’s a lot to keep track of when you operate a small business.
And it’s not just changing rules and regulations that can catch small businesses off guard. As a business grows and gains more employees, the total number of applicable employment rules and regulations increases, too.
In this week’s eESI podcast, Why Outsource Your HR, eESI strategic business consultant Steve Hookstra spoke to us about this very issue.
Steve explained that he had recently helped an eESI client who was transitioning from being an employer of 10 to an employer of over 50 employees. This change in headcount meant that the company moved from being responsible for complying with approximately 12 different employment rules and regulations to being subject to over 200. That’s a pretty steep learning curve.
Even companies with a full-time HR person benefit from partnering with a trusted HR partner to make sure nothing is missed. Plus, when an HR Outsource partner, like eESI, serves as the employer of record for a small business, much of the liability for payroll taxes and other compliance issues shifts to the HR partner.
Professional HR Outsourcing bring expertise and economies of scale.
Beyond saving time and avoiding costly compliance problems, companies that outsource their HR also get the dual advantages of expertise and economies of scale.
Most business owners didn’t start up shop because they wanted to become HR experts.
A company like eESI brings together experts from each of the various areas of HR and makes them economically available to businesses of any size. The economies of scale we enjoy also helps our clients get access to a greater variety of employment-related services and benefits at affordable prices. Often our clients have access to offers that aren’t available to them otherwise.
In the case of that company accelerating from 10 to 50, Steve Hookstra tells us that benefits savings topped well over $100,000 and the benefits offerings were significantly better than what the employer had access to before the expansion, and new partnership with eESI.
Of course, there are other benefits and some risks to outsourcing your HR. Kimberly Amadeo outlines both the pros and cons of outsourcing in her article, Human Resources Outsourcing and Its Effect on the U.S. Economy. Our takeaway? When choosing to outsource, make sure you work with a reliable HR Business partner.
If you are curious about some of the other benefits of outsourcing HR, be sure to listen to our full interview with Steve Hookstra. He had a lot to say about just how HR Outsourcing can save small businesses money and make their HR headaches go away. And, make sure to download our free ‘Why Outsource HR’ Guide … the guide lists the kinds of tasks and assistance a company like eESI can provide, and gives you key questions that can help you decide if outsourcing is right for your company.
To obtain your free download, simply click below.
And, if you’d like to learn more about how HR Outsourcing can help your business, call us at +1(210) 495-1171. Let us share our expertise so you can get back to building your company.