Operations & resources

Should you outsource your HR?

As a small or medium enterprise (SME) you set up your business to deliver a service, manufacture or produce goods for customers. However, there comes a time when you have to consider outsourcing functions of your business such as finance, IT, HR or Health & Safety. So let’s consider this from an HR perspective.

If you are spending too much time:

  • trying to find documents you can use for remote working, COVID-19, job retention scheme, etc.
  • not knowing what policies you should have in place
  • ringing legal helplines for advice on people matters
  • not knowing what to fill in to complete a contract of employment
  • filing paperwork
  • checking people have read and understood communications issued
  • searching the internet for information
  • trying to work out what skills will be needed for your business
  • not knowing where to start to recruit a new person

…then may be the time has come for you to reach out for an outsourced HR service.

Let’s have a look at the benefits for putting a business case forward:

  1. reduced costs
  2. increased efficiency
  3. access to HR IT Systems
  4. improved people management
  5. access to HR metrics
  6. HR expertise
  7. pay for what support you need
  8. capacity for HR to operate more strategically
  9. increased flexibility and response to problems
  10. fits with outsourcing strategy of a number of functions

Potential Challenges

Outsource HR does not create good people management overnight. If you have line managers or you manage teams yourself, your HR consultant can provide training and support to do this; but can’t manage your people for you.

Structure your outsourced HR provision to what fits your business – your rationale for outsourcing HR may change as the business environment changes.

Isn’t it just HR admin?

That takes care of your HR basics, but what if your HR consultant works with your business to develop your people and grow your business. You could have a monthly review of key HR KPIs e.g. absence, COVID absence & turnover. Maybe create an HR strategy to focus on your workforce plan: action for your business to survive a pandemic for example?

In addition, an HR consultant could support your business to manage processes within employment law – such as varying contracts, redundancy, recruitment management – including benchmarking salaries, absence management or succession planning. Help could also be offered to build a culture of continuous learning and development – providing managers with the tools to focus on outputs from employees, setting objectives that match your business goals and building employee engagement; leading to a better business for you and your staff.


There are significant benefits to outsourcing your HR function that will give you time to run your business and reduce concerns over employment law, potential tribunal claims, statutory requirements and save money. Your outsourced HR does not have a salary/national insurance or holiday pay and can provide specialist services when you need them.

So why not become pro-active rather than reactive? You need to decide if you want HR expertise and efficiency to move your business forward and what level of support you need.

Originally posted 2020-10-16 10:38:49.

Nicky Buckley
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Nicky Buckley

Nicky created East Midlands HR to provide professional, affordable HR Services for SME businesses to enable them to have the right advice how and when they need it. Nicky is a Breathe HR partner, providing a cloud based HR System, which reduces paperwork for effective HR Admin, Absence & Holiday Management, compliant to GDPR and more. Nicky is passionate about HR and whilst she delivers on compliance to Employment Law, she really enjoys developing line managers to have the people skills to deliver results through their teams.

Should you outsource your HR?

by Nicky Buckley Time to read: 2 min