HR Outsourcing for Small Business 101: 7 HR Tasks You Should Outsource

Welcome to our guide on HR outsourcing for small businesses. Discover crucial tasks to outsource, and why a PEO is your strategic partner for growth.



There are plenty of services people outsource on a regular basis, such as ordering a meal from a restaurant, paying a teenager to mow their lawn, or hiring someone to clean their house. But for some small business owners, outsourcing professional services to another company feels like a loss of control. 

If you’re part of the apprehensive crowd, you may be impeding your company’s growth. As an organization grows, there’s an increasing complexity to manage everything yourself. In fact, more than 85% of business owners are unhappy with the way they distribute their time to proper business activities.

Small businesses often face challenges in managing their HR functions efficiently, and HR outsourcing has emerged as a viable solution, offering numerous benefits from cost savings to improved compliance. Let's delve deeper into the world of HR outsourcing services for small businesses.

Here at Stratus HR, we can help you navigate the complex world of HR tasks. With our expertise, you can focus on growth while we handle everything from recruitment to risk management. Book a free consultation with us today and let's take your business to new heights.

What is HR Outsourcing?

HR outsourcing means delegating specific HR functions and activities to an external provider. This allows businesses to focus on their core operations while ensuring that their HR processes are handled by experts.

Why Partnering With a Small Business HR Outsourcing Company is a Must for SMBs

  1. Cost savings: Instead of hiring a full-time HR manager, businesses can save costs by outsourcing specific HR tasks.

  2. Expertise: HR outsourcing companies bring a wealth of experience and knowledge, ensuring best practices are followed.

  3. Improved compliance: With ever-changing labor laws, outsourcing HR services ensures businesses remain compliant, reducing legal risks.

  4. Efficiency: Outsourcing can streamline HR processes, from recruitment to payroll, making operations smoother.

Top HR Tasks to Outsource in 2024

For many small businesses, managing an entire HR department can be overwhelming, especially when resources are limited and the focus is on growth. Outsourcing specific HR tasks can be a game-changer, allowing businesses to scale efficiently without the added stress of HR management. Here are the top HR tasks that, when outsourced, can significantly benefit a small business.

1. Recruitment and Talent Acquisition:

Why Outsource? Finding the right talent is time-consuming. Outsourcing this task ensures you get experts who can tap into broader networks, use advanced tools, and streamline the hiring process.

Benefits: Faster hiring, access to a larger talent pool, and reduced hiring costs.

2. Payroll Management:

Why Outsource? Payroll involves complex calculations, tax implications, and compliance requirements.

Benefits: Ensures timely and accurate salary disbursement, tax compliance, and reduced errors.

3. Employee Benefits Administration:

Why Outsource? Managing benefits requires staying updated with regulations and negotiating with vendors.

Benefits: Competitive benefits packages, compliance with laws, and efficient benefits administration.

4. Training and Development:

Why Outsource? External providers can offer specialized training programs tailored to your business needs.

Benefits: Skill enhancement, employee retention, and improved performance.

5. Performance Management:

Why Outsource? Objective performance evaluations require expertise and can be time-intensive.

Benefits: Fair appraisals, identification of training needs, and improved employee morale.

6. Legal Compliance and Risk Management:

Why Outsource? Staying compliant with labor laws and regulations is crucial but can be complex.

Benefits: Reduced legal risks, updated compliance policies, and a safer work environment.

7. Employee Onboarding and Offboarding:

Why Outsource? These processes require structured protocols to ensure smooth transitions.

Benefits: Efficient onboarding of new hires, reduced time-to-productivity, and structured exit processes.

8. Employee Relations and Conflict Resolution:

Why Outsource? Handling conflicts requires expertise to ensure fair resolution without escalating issues.

Benefits: Harmonious workplace, reduced employee turnover, and improved team dynamics.

For small businesses looking to outsource their entire HR function, partnering with a Professional Employer Organization (PEO) can be the most strategic move. A PEO acts as a co-employer, managing all HR-related tasks, from recruitment to risk management, under one umbrella. This not only ensures that each HR function is handled by experts but also provides businesses with the advantage of consolidated services, streamlined processes, and cost savings.

We Can Help You Take Control of Your Time 

Ultimately, the best HR tasks to outsource will depend on the specific needs of your company. Determine if your time could be better spent on other aspects of growing your business, then do your due diligence and compare outsourced solutions. In the end, you’ll likely find what other businesses have already discovered: an HR outsourcing provider can help you streamline your operations, reduce costs, regain lost time, and focus on your core competencies.

Book a free consultation with one of our HR experts to discover how we can help your business grow through outsourcing.

Original content by Rilwan Kazeem, edited with permission.

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