Considering that the Human Resource team is accountable for manpower recruitment and development of employee programs, company owners must maintain a skilled and highly-motivated HR solutions team.
Whether an in-house or outsourced, the HR department plays a significant role in supporting business harmony and success. Hence, even startup companies with less than 10 employees are still in need of HR solutions leader to support their organisations. When it comes to hiring people for HR solutions tasks, companies have two options on whether to keep their own department or partner with an HR solutions outsourcing agency.
Deciding whether or not o keep an in-house HR team for your company should not be a real quick decision. It is paramount to consider factors that may influence your decisionmaking in the long run. These include company size, budget, HR needs and, of course, the pros and cons.
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To help you get started, let us evaluate whether it’s time for your business to go in-house or outsource HR solution.
Advantages of Keeping an In-house HR team
Big companies and a couple of startups are considering an in-house HR department, basically, to have full control and monitoring of human resource primary tasks as well as the company’s confidential records of intellectual properties and employees’ profiles, contracts, and payrolls. For companies that value face-to-face conversations, appointing their very own HR team to work with every day is beneficial in improving engagement between employees.
As the business grows every day, it means there are lots of hiring to do and more people to be paid. If your company is large enough — growing from 10 employees to 50 and all the way up to 500 workers — then you probably need an in-house HR team at this point. First of all, you will need to have some people on staff who are able to handle different HR functions to make a better company.
Disadvantages of Going In-House
An in-house solution, however, is not budget-efficient, especially for small companies. Maintaining your own HR department requires formal training and securing health insurance plan and other relevant benefits and compensations. Thus, a lot of companies consider building an in-house team when the company and workforce are stable enough.
Common Kinds of Companies that Outsource Hr
Businesses vary in a lot of things and each is quite unique. Hence, the best way to simplify the discussion of partnering with a third-party agency is to consider the stability and growth stage of the company. So, which are the companies that opt for HR outsourcing?
At this stage, where the company comprises 0-10 employees, it makes a lot of sense to consider HR outsourcing. You handle a small number of workers, so what’s the worst thing that can happen? Besides, there are several agencies and software platforms that can help you manage HR functions such as recruitment and management of benefits, payroll, time off, and other related tasks.
These kinds of business are the ones that increase employees from 10 to 50. Companies of this size may probably need to hire an in-house HR manager as the company is meant to grow every day. Although hiring a specific department of HR functions might seem a little bit tempting, it is still making plenty of sense to consider an outsourcing agency. If your HR manager is using a professional employer organisation (PEO) software, then access to automated payroll and benefits should be handy.
Otherwise, there are specific tasks that can be outsourced, if and when you are not accustomed to software utilisation. These include payroll and tax-related services, employee assistance and counselling, employment law compliance, and administration of benefits. That said, you don’t need to overload your in-house HR manager when you can arm them with either a software platform or an outsourcing agency.