Why is outsourcing so important for small businesses?

September 13, 2021

Outsourcing is a common way for small businesses to keep their operational costs low so that they can focus on their core activities. Outsourced actions can be infrequent, such as hiring an accountant to complete end of year accounts, or more regular, such as using a cleaning company to maintain your workspace every week.

In this article, we will take a look at some of the benefits of working with an external HR partner, such as VERO HR.

Add value while saving money

Human resources management is a time-consuming and costly activity. Let’s take recruitment as an example. For every person you hire, you must write an advertisement, screen CVs, and arrange interviews. After deciding on a candidate, you then have to arrange for their contract, induction and training. All of this equates to a significant amount of time.

Before his untimely death in 2020, Tony Hsieh was a visionary business leader and the CEO of Zappos. In 2010, as part of an interview series by Business Insider, entitled Inspiring Performers, Tony Hsieh estimated that his own bad hires had cost his company Zappos over $100 million.

By working with an external HR partner, you are investing in an experienced HR professional who will spend the time required to find a candidate with the right skills and fit for your company, thus, allowing you to spend time focusing on more critical tasks, such as the leadership of your team and company direction.

Expertise

Human Resources is a particular skill set, which requires a knowledge of employment law and its practices. The HR team also plays a vital role in employee engagement and wellbeing.

Within a small business, the value of having a dedicated HR person or team is not always evident. If there are only a small number of people to manage, business owners may feel like they have it covered. But, as a business grows, leaders focus will be on the day-to-day needs of the business and the “people” element can become lost, having a knock-on effect to employee happiness, company culture and overall productivity.

Employee Happiness

As mentioned in the last section, good people management leads to happy and motivated staff. According to a recent survey, poor workplace culture costs the UK economy £23.6 billion a year.

Implementing people and family-friendly policies that make your employees feel supported are essential to your company’s overall success and profitability.

Single Point of Failure

There are many reasons why your business may be at risk of only having one staff member with proficient knowledge of a core activity. Whatever the reason, this places you at a disadvantage if the employee is taken sick or books time off work. And what happens if they decide to leave, taking that knowledge with them? Working with an external HR and Payroll partner removes this single point of failure altogether. It also provides the peace of mind that you will be up to date with current HR legislation, and your line managers and employees will be supported every working day.

Owning Risk

Owning or running a business, whatever the size, is inherently risky. Therefore, every business should have policies in place and be prepared for the unexpected to ensure that their business is not exposed to risk. Examples include employment grievances, accidents at work, or legal disputes. Outsourcing your HR functions to an external HR partner means that you can be confident that you have legally sound policies in place to protect your business.

Technology

Having the right technology in place is important for any business, making you and your team more productive. The same can be said for HR software. HR software enables you to track your employee’s employment history, performance, benefits, and absence. It can also provide self-service functionality for your employees to manage their data, freeing up the time of your leadership team. However, finding the right HR software within your budget can sometimes be challenging. Working with an external HR partner opens the doors to the right HR tools at an affordable rate. You can learn more about Vero Technology here.

When trying to decide if outsourcing is right for you, don’t limit yourself by simply looking at the cost of the service. Yes, you are buying a service. But you are also investing in experience and the value it brings to your business. Outsourcing provides the perfect opportunity for your business to be nurtured, grow, and innovate.

Vero HR offers a range of external HR services to meet the needs of your business. Please do not hesitate to give us a call on 01733 830830 or email us at enquiries@verohr.co.uk.

Sign up to our newsletter!

* indicates required