Should I outsource HR for my small business?

Blog
Day to Day HR
Should I outsource HR for my small business?

Managing a small business is a matter of balance and compromise – with limited resources and only a small number of people, how do you balance the multiple demands on your time? Where can you compromise on the nice-to-haves, make sure of the must-haves, and still leave room for growth?

When you become an employer, you quickly get to the point where HR becomes one of those must-haves. Bringing people into your business means taking on new responsibility, and as you grow, so does the admin complexity.

Managing contracts, policies, compliance, and pay – not to mention the unpredictable challenges that come with employing people – can quickly start taking you away from the main mission.

But HR isn’t an area to look for compromise. A ‘winging it’ attitude to the obligations set down in UK employment law carries serious risks. Best case scenario, you make mistakes – you struggle to hold onto talent. Worst case – accidents, employment tribunals, huge fines, criminal court… eeesh!

When this realisation hits home, many small business owners consider outsourcing.

What is HR outsourcing?

For clarity, HR outsourcing for small business is where you hire an external support provider to handle some or all the HR tasks you would otherwise have to manage in-house. This can include contract management, policy reviews and employment law updates – and the good providers (cough… like citrus HR) will offer advice on a wide range of issues and help you build your own people management skills.

What are the pros of HR outsourcing for small businesses?

Cost: The obvious alternatives to outsourcing your HR are continuing to manage everything yourself, hiring an in-house HR manager, or training an existing employee to take on the responsibility. Each of these carries an additional cost, with no guarantee that an internal HR manager will have the wide range of expertise required to cover you in every situation. Hopefully you’ll start to see how these costs can mount up quickly, and we work with thousands of UK small businesses who agree our comprehensive HR support is the best value.

Expertise: Similarly, there are risks associated with running HR in-house; maybe on spreadsheets, paper lists, and post-it notes. Small mistakes, a missed payroll deadline or a holiday booking clash, might not be the end of the world but it’ll leave people disgruntled. But what about firing an underperforming employee, handling conflict or harassment, or supporting someone who’s grieving? People are amazing but can be messy and unpredictable. Situations will inevitably arise where mistakes can cause serious problems for you and your people, and the wisest course is to seek expert advice.

Compliance: There are hundreds of ways even the most well-meaning employer can get compliance wrong, and many of them have serious ramifications. The right HR support business will make sure you’re up to date with constantly changing employment regulations, notify you of deadlines, and make sure your contracts, policies and documentation are compliant and where they need to be, meaning you can concentrate on your customers in the knowledge that the details are being taken care of.

Tools: Some HR support providers offer specialist software that makes light work of many of the administrative tasks, like payroll, absence and leave, and performance reviews, that have been taking up so much of your time. Our citrus HR software is designed specifically for small, growing businesses, and is highly rated for usability and effectiveness.

Time: Nobody starts a business with the intention of spending hours a week managing HR admin. Those hours are stolen from working with customers, marketing, sales, and other important tasks. Time is the most precious resource a small business owner has, there’s never enough of it, and our customers tell us that taking it back is one of the most important benefits of the service we provide.

What are the cons of HR support for small businesses?

Cultural fit: We understand that handing over such an important part of your business to an outsider can be nerve wracking for some small businesses. Some owners doubt that an outsourced service will understand their unique challenges, their people, their culture. This is a real concern (we get it, we’ve been there!), and it’s why – unlike some of our larger competitors – we take the time to get to know our customers, so our advice is always bespoke.

Price confusion: The market for HR support is a busy one, and not all providers offer transparent pricing like we do. When you’re in a pinch and you need their help, some will try and hit you with hidden costs for additional extras. Ask tough questions before you sign to be completely clear on the service levels you can expect and ensure everything you need is included in the quoted cost.

Flexibility: Similarly, small business owners should be wary of getting tied into long-term contracts with outsourcers where they end up paying for services they don’t use. We specialise in working exclusively with small businesses, so we understand the need for flexibility. That’s why all the services we offer are available on a monthly rolling contract. We will never tie you in.

Distance: A common concern is that using an external HR support makes it somehow less personal for your people. But while it’s true that there will be less personal interaction when it comes to booking leave, managing absences etc., having easy-to-use HR software, help employees know that their employer has their best interests at heart. Not only that, what HR support often offers is advice to you, the business owner or manager, so you keep that connection with your people but have the confidence that you’re giving the right advice and following the law.

Get HR Support

At citrus HR, we operate a team of in-house HR experts who offer friendly, one-to-one advice on all matters of HR and people management. We’ll take the time to understand your needs and provide a service that caters to your specific challenges. There’s no set up fee, no long-term contractual tie in, and we will never be beaten on quality or customer service.

If you want to find out more about how HR outsourcing can benefit your small business, our HR consultants can help.

Get in touch on info@citrushr.com or give us a call on 0333 014 3888 to find out more about how we can help your business with friendly, expert HR support.