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It is always critical for businesses to evaluate their staffing needs because human talent is a key factor in every business’s success. But human talent also consumes a large part of a business’s operating costs. A critical decision faced by many businesses is whether to hire a complete HR staff or to outsource HR functions. In fact, the HR Dive 2021 Identity of HR Survey found that 54 percent of organizations outsource benefits administration, and 53 percent outsourced payroll processing. 

Outsourcing Can be Used in Many Ways 

The U.S. Small Business Administration has identified ten small business functions that can easily be outsourced including manufacturing, IT management, sales, customer service, administrative tasks, shipping and logistics, research, marketing, accounting, and human resources.  

Which HR Tasks Can be Outsourced? 

Outsource HR services can include: 

  • Payroll and related tax services. Running payroll accurately and on time is an intensive process and can result in legal and tax trouble if not done well. Other aspects of outsource HR services can include automated direct deposits, managing paid time off, and record keeping. 
  • Benefits administration. This can include administering health benefits, 401(k) plans, and other benefits. 
  • Employment law compliance. This includes workers’ compensation, hiring process compliance, and other workplace regulations. 
  • Employee Assistance Program (EAP) and counseling to deal with employees’ mental health. 

Why Outsource HR Services 

Here are eight good reasons to outsource HR services: 

  1. Save money. Instead of hiring, training, and maintaining a team of in-house HR specialists, and paying for their space and support, you can hire seasoned experts to handle key functions. 
  2. Reduce HR and employment compliance risks. Outsource HR professionals will be up-to-date with employment laws and regulations and will help you to stay compliant with them. 
  3. Offer better benefits, perks, and services than you likely could do on your own because of an outsource provider’s experience with many other clients. 
  4. Allow your team to focus on more mission-critical functions.  
  5. Make sure that HR functions are handled professionally which will help employees have a good work experience and be more engaged and more productive. That can help them perform at their best and feel treated fairly and valued. 
  6. Get better access to the latest HR technology. 
  7. Improve regulation compliance. 
  8. Using an outsource HR company can help you build a strong foundation that can facilitate establishing an in-house HR infrastructure. 

How to Tell When It’s Time to Outsource HR 

Here are signs that it may be time to outsource HR. First, you may be spending too much time dealing with HR problems. Second, you may feel some concerns about liability exposure. Third, you want to find ways to save time and money. Fourth, HR support functions are dispersed and somewhat confused. Fifth, you can’t respond to HR needs and changes as quickly as you want to. 

Choose an Outsource HR Service to Assist You 

Choose Palmetto Payroll, South Carolina’s payroll partner. We serve over 300 businesses throughout South Carolina, with offices in Columbia and Charleston, offering expert payroll, tax filing, tax depositing, Human Resource services, timekeeping, and management reporting. We pride ourselves on superb customer service and efficiency along with the latest technology.