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Human resources departments have always been important to businesses. However, the current focus on creating a healthy and collaborative company culture has made their role even more important. The benefits a company can offer prospective employees have a greater bearing on the company’s future than they ever have before. The rising cost of healthcare and the introduction of benefits like high-deductible health insurance plans may be one reason behind the increased focus on benefits.

The Unique Human Resources Challenges of Small Businesses

As a small business owner, your ability to build a human resources team that can compete with companies that have larger budgets can seem daunting. You have probably also noticed that the issues today’s HR professionals must navigate are more complicated than ever. Outsourcing human resources makes sense when you would prefer someone with years of experience with employee-related legal issues to handle the problem for you.

When you consider the many tasks you must accomplish with a limited amount of funds – hiring employees, advertising, purchasing inventory and supplies – there may not be a lot left over to hire people to staff an HR department. It may not be the best use of company finances even if you do decide to follow through with hiring full-time or part-time help.

At the earliest stages of a business, or for small businesses that do not expect to expand, outsourcing HR can be a better solution. With someone else handling the numerous and detailed tasks of the typical human resources department, you can allocate your funds to other activities that sustain long-term profitability.

Another risk to consider is the repercussions your small business could suffer if you hire an inexperienced human resources employee who makes too many mistakes. It will definitely hurt morale around the office, but a bad HR hire could also have significant financial consequences. This is especially true when the employee submits incorrect information or late payments to the Internal Revenue Service (IRS) or the revenue department for your state.

When you consider these risks along with the complexities of compliance and benefit issues, it makes sense to consider outsourcing HR and payroll functions to a company that specializes in them.

Select Only the Services That You Need

Perhaps you currently have a human resources employee who can manage basic tasks like entering new employee data and ensuring that timecards are correct. If so, it’s a good idea to allow that person to continue in his or her role and outsource some of the more complex issues.


At Palmetto Payroll, we offer expert assistance in the following areas:

  • Human Resources
  • Management Reporting
  • Payroll
  • Tax Deposits and Filing
  • Time Keeping
  • Self-Service Solutions  

You might be surprised at just how much money and stress you can save by outsourcing HR. Please contact Palmetto Payroll today to set up a time to learn more about each of our small business solutions.