Should you hire a full-time HR manager or outsource your HR functions?

As your business grows, you may wonder if it is necessary to hire an in-house Human Resources manager. While HR professionals can be a key resource for helping your business attract, develop and retain better employees, the investment to do so may not be needed until your business surpasses 150-200 employees. HR professionals are typically responsible for the following administrative functions:

  • Managing employee relations
  • Administering payroll
  • Overseeing compensation and employee benefits packages
  • Ensuring compliance with labor laws and regulations
  • Monitoring training programs
  • Supporting employee development
  • Recruiting

While it may be conventional to have someone on-site handle these activities, there are some important factors to consider before adding this kind of overhead expense to your cost base. Outsourcing your HR functions could prove to deliver far greater advantages and capabilities at a lower cost. 

What Are the Drawbacks to Hiring an In-House HR Professional?

Often, business owners can be too quick to pull the trigger on hiring a full-time HR manager. Feeling the administrative burden that comes from a growing workforce, employers may feel it’s the next natural step, however, there are some key drawbacks to consider before making this decision. Let’s examine these a bit closer.

Finding Talented Individuals Can Be Hard

Simply hiring one person to handle it all may be an accident waiting to happen. Often an individual with a human resources background may have training or experience limited to one or two specific areas in HR, but is not equipped to handle all of the essential HR functions your business needs. Getting them up to speed can also take several months. 

Additionally, highly compensated HR professionals can get bogged down doing lower value administrative work, diluting their real strategic value. This contributes to frustration, as they would rather focus on more strategic areas like talent acquisition and development.

In Tucson, AZ, an experienced HR manager can command a salary upwards of $70,000 or more plus benefits. If the employee ultimately doesn’t work out, it’s back to the drawing board — having wasted a significant amount of money and time.

Focus HR offers a professional human resources team at a lower investment than the cost of a full-time employee. Our staff has significant experience in managing employee benefits, overseeing payroll, administering 401(k) plans, and handling other common human resource functions.  

Outsourcing Can Lead to Better Results

An in-house HR manager may have the advantage of being at the office every day, however, from our experience, this is rarely needed. 

At Focus HR, we offer a turn-key HR system structured around industry best practices, superior technology, and a team of local HR professionals to meet your HR needs in more efficient and effective ways.

Our dedicated HR managers interact regularly with our clients, as often as they need.  This arrangement allows us to meet face to face or on the phone to discuss important matters while back-office administrative functions are handled off-site at our office. 

The frequency and scope of HR support we provide is flexible and can adjust to meet the individual needs of our clients as their businesses evolve and grow.

The Cost of In-House HR Can Escalate Quickly

It takes time, often months, for HR professionals to find their footing and learn how to work within the business to make a valuable contribution. 

Once up to speed, they often seek to add additional support to handle the tedious administrative aspects that naturally grow with HR, which only adds additional overhead costs. There is also an expectation and hope that the newly hired HR professional will stay with the company. Should the HR professional leave, the additional cost and time spent in hiring and training can be significant. 

In contrast, outsourcing HR functions through Focus HR is much more cost effective. Our team is fully operational with your company within a few weeks. We assign dedicated HR specialists to your account with cross-trained backup, ensuring that there are no gaps in coverage.

It’s Hard to Stay Abreast of Regulations and Compliance Updates… Which Can Increase Your Liability 

It’s difficult for any one individual to stay abreast of the constant changes to employment laws and regulations, increasing your risk exposure around employee-related matters.

The team at Focus HR is vigilant in keeping updated on changes to state and federal employment laws. We take our responsibilities seriously to mitigate employee-related risk in your business.. 

In addition, we stay current on any changes to your employee benefits plans so that we are able to answer questions and put proper processes in place to manage those benefits for you.

Tactical vs Strategic 

While individuals hired internally for human resource positions should be more focused on strategic matters relating to employee acquisition, development and retention, they often lack the necessary skill set or vision needed to accelerate growth.

Thanks to our extensive experience in human resources, Focus HR can help you develop a strategic HR plan that allows you to make HR management decisions now that will support the future direction and growth of your organization. We work with many different companies and have seen the results of different management styles. 

We identify areas for improvement in order to scale growth. This can be immensely helpful to a developing company.

Does Your Company Need an Outsourced HR Solution?

At Focus HR, we manage your most valuable asset (your employees), so you can focus on growing your business. We will work to understand the needs of your company and establish an appropriate plan.

Schedule a free consultation today, by filling out the form below.

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