HR Outsourcing Outsourcing

Thinking of HR Outsourcing for your Business? Follow these 4 Steps

Originally published by Keylen Villagrana, Better Business Bureau, September 1, 2021

As a small business owner, your company’s human resources are likely being handled one of two ways: a single employee is dedicated to managing all those needs, or HR is one of several functions an office manager overlooks for your team.

Managing the human resource’s function is often a heavy burden for a small business. Limited bandwidth can make those demands feel even more overwhelming. So, how do you determine what particular aspects of HR to outsource and what to keep in-house?

In a recent BBB-hosted webinar, Krisann Hatch, Director of Workplace Innovation at Archbright, provided a handy four-step process for helping small business owners determine what duties to outsource and, most importantly, how to identify trustworthy partners to supply those services.


1. Identify and Prioritize

Krisann emphasized the importance for small business owners to reflect. “What is your mission, what is your strategy, what’s your long-term vision, and where does the “people aspect” play into that?”

This is the time to think big picture. Where would you like your business to be in five years? What are the major strategic pieces that’ll help you get there? Let’s say you need to focus on recruiting new talent and improve your retention numbers. Or do you have a pool of employees you’d like to help develop into management positions?

Determine your priorities and keep them top of mind to drive your company forward.


2. Conduct Assessment of Current State

This is the step where you must be very honest with yourself. What tasks are too time-consuming and don’t directly help you accomplish your priorities? Conduct a full “inventory” to identify what is currently being done, how much time is spent on those activities, and identify the gaps. What is falling through the cracks that needs attention?

Essentially, determine the resources and time you’re investing in priority initiatives.


3. Consider Which Function Can/Should be Outsourced

This can be answered in two questions: What outside expertise is crucially needed? What can easily be outsourced to free up time for HR to focus on strategic initiatives?

Hatch elaborated by providing the following example:

“We have a lot of our manufacturing members that do a lot of temporary staffing, and it is absolutely key to keeping things running. But it could also be done effectively and very efficiently by an outside party….it just doesn’t drive the strategic mission of the organization.”

Completing certain functions in-house does cut costs and offers a heightened sense of control, but consider your business’s bigger picture and make decisions based on its long-term vision.


4. Research Options and Find Trusted Partners

Finally, once you’ve identified the functions you’d like to outsource, look for trusted partners. Hatch provided a list of criteria to help you evaluate:

  • Expertise
  • Reputation
  • Ease of Use
  • On-Site Assistance
  • A La Carte Service Offerings
  • Long-Term Contract Required
  • Online Support Materials
  • Pricing Transparency
  • Flexibility and Customization

Make time to ask questions, research the company’s reputation through trusted sources, and ask for referrals from professional colleagues/partners.

Bottom line: When considering whether to outsource your HR needs, get away from the mindset that your team can do everything. Ask yourself, “What’s the best use of their time to drive our company forward?”