Does a Calculator Make Me an Accountant? The Case for an HR Outsourcing Company

I have a calculator and pencils on my desk, a spreadsheet on my computer, a short stack of ledger paper in a drawer somewhere, and a working knowledge of how to pay for things. I would be a great accountant, right? 

Wrong. I’m missing one thing — skills. Make that two things — I’m also missing the desire to be an accountant. 

Truthfully, there’s no one who would disagree with me. Yes, I can balance my checkbook, but if I were working as an accountant, I would be slow, make mistakes, hate my job, and would spend any money I saved by DIY-ing it on Ben and Jerry’s for emotional support. 

Here’s the problem, though: I see this scenario playing itself out all the time. It stems from a natural tendency every one of us would have if we were starting or growing a company — keep costs and commitments low by doing everything yourself.  

But should that be the strategy when those tasks are not in your wheelhouse? Enter my smooth transition for how this applies to HR outsourcing. 

What is HR Outsourcing? 

Human Resources (HR) outsourcing is a strategic practice where a company entrusts some or all its HR functions to third-party experts — people who have HR services in their wheelhouse. This approach allows companies to offload administrative tasks, streamline compliance management, and free up valuable time and resources to focus on growth. 

Is There a Financial Advantage for Outsourcing HR Processes? 

Outsourcing HR services can offer huge cost savings for companies. By entrusting HR tasks to third-party experts, businesses can reduce the financial burden of maintaining a fully staffed in-house HR team, or turn their internal HR team's focus on more strategic initiatives while their outsourced provider handles the administrative tasks. 

Additionally, HR outsourcing provides economies of scale, which enables them to offer services at a lower cost than what it would cost a company to perform the same tasks in-house.  

We do this in our personal lives already whenever we go to a hair stylist, hire a painter, or have a caterer handle a wedding dinner. It’s not like we don't have scissors, paintbrushes and frying pans; we just know that there is a pro who will do it much more efficiently and better — and sometimes we would rather spend our time doing something else rather than cutting, painting, or cooking. 

When you outsource HR, the cost savings you get from hiring out to HR professionals can then be reinvested into your business, allowing your company to focus on growth and development. 

Benefits of HR Outsourcing Services 

Most companies provide HR consulting services that are customizable to meet the diverse needs of businesses. For example, a large company is going to have very different needs from those of a small business. 

Regardless of size, benefits to outsourcing include: 

• Access to expertise in HR management and labor laws 
• Scalability of HR operations 
• Minimization of legal risks by sharing liability 
• Complementing an existing in-house HR team 
• Improved employee benefits 
• Increased employee retention due to more comprehensive benefits 
• Enhanced compliance and risk management 

My philosophy is simple: think of tasks that are not your strong suits as prime opportunities to bring in the expertise you do not have. When you think about it, this is the reason you hired an accountant to do your taxes or a janitor to clean the office bathrooms. 

Which HR Processes Can Be Outsourced? 

Most HR outsourcing providers can handle a wide range of HR functions, including: 

• Payroll processing 
• Benefits administration 
• Talent management 
• HR administration 
• Performance management 
• Training programs 
• Tax administration 
• Legal compliance 
• Risk management 

Many HR outsourcing companies also provide HR technology to manage employee data, improve HR workflows, and enhance operational efficiency. 

Really, you should consider the opportunity cost of not outsourcing these tasks. Either nothing else gets done because there is no time and the business growth languishes, or the task you are posing as proficient in goes horribly awry and someone else (or, possibly, a whole legal team) has to step in to fix it. Unless you have expertise in an area and plenty of time to focus on it, your default should be to consider outsourcing. 

Choosing the Right Outsourcing Partner 

Once you have decided to outsource, it's time to select the right HR outsourcing partner. You have the option of outsourcing just one area of HR, such as payroll processing or benefits administration, or you can choose a full-service HR solution provider like a Professional Employer Organization (PEO). 

When deciding among HR partners, consider the following factors: 

• Experience and expertise in HR management 
• Range of services offered 
• Scalability of services 
• Cost savings 
• Compliance management and risk management capabilities 
• Employee benefits and talent management offerings 
• Company culture of the PEO 

Think back to that outsourced wedding dinner — there's plenty to think about to make sure it's the right fit for what you need. Doesn’t your business deserve the same treatment? 

How Stratus HR Helps Your Business 

Stratus HR is a Professional Employer Organization (PEO) that employs certified HR professionals for every aspect of human resources, from HR technology and employment law expertise to payroll and benefits administration.

At Stratus, we believe employees desire to add value and have purpose. Our goal is to make your company an employer of choice by providing HR support, tools, and resources that will improve employee satisfaction and business performance. 

For more information, please book a free consultation and our team will contact you shortly.