When to outsource your small business’s HR
Have you been wondering how to approach your international human resources? Outsourcing can give you access to skills, knowledge and support, and save you costs in the long run. Most small to medium sized business people know the frustration of spending more time than they want on non-revenue generating activities. From payroll and human resource management to benefits and compensation, managers and directors can spend a significant proportion of their day engaged in these necessary but time consuming tasks. The answer for many businesses may be to outsource part or all of their HR functions to third party providers so that they can focus on their core business. But when does it make sense for you to outsource? In assessing whether you should or not, there are several questions to consider before you make a decision.
In my experience, international businesses with fewer than 50 employees rarely have an HR team. Instead they may have a CFO in the US who overlooks the expenditure of the international business, but rarely possesses the required country specific legal and HR expertise.
What services do you need?
The nature of the work undertaken by an outsourced HR consultant varies hugely dependent on the nature of the business and the talents of the employees within the organisation. With regard to our HR consulting firm, we work for organisations with no international HR department ensuring the business meets all necessary legal requirements in terms of policies and contracts. In addition, we deal with any employee relations issues as they arise including redundancy, dismissals, employment administration, performance management support, employer liability management support, training & development, recruiting and outplacement support. We also work for businesses which do employ an HR team – we may be called in to support that team when issues arise that require specific legal or International HR expertise.
How much does an outsourced service cost?
It is important to establish up front the way in which the outsourced service is billed. By and large, the cost of the service varies depending on the level of outsourcing that is required. For example, we may be asked to assist on a specific well-defined project in which case we will estimate the cost involved, or at least offer a range of costs within which it will fall. Alternatively, we may work alongside the business dealing with day-to-day issues on a retained basis, or, we may be called in to sort an “emergency” for which we charge an hourly rate.
What type of provider do you want?
Do you want a “face” who gets to know your business, staff and culture, who can be flexible in the service you offer and who, by virtue of being a phone call away, can operate as if you have your very own HR department? Do you only want to have specific country related legal and HR expertise and deal with your employees directly? We offer both solutions. I would say that as a general rule of thumb, when administrative, decision making processes begin slowing down due to lack of expertise or time, it is time to consider outsourcing the management of your International human resources. The attraction and retention of talent is now such a business critical operation that for many businesses, outsourcing their HR function is the best way to ensure that what is arguably their most valuable asset is well managed, freeing them up to concentrate on their core business.