Human resources is function in a business that deals the human capital within an organization. It’s a vital role in helping companies to stay in compliance with complicated laws and regulations. It also provides value with strategic initiatives, such as building solid teams, recruiting, hiring, and establishing overall company culture. Human resources management is crucial to an organization’s success.
What is Human Resources
Human resources (HR) oversees the issues regarding the people within an organization and all employee-related matters. Collectively, HR represents one of the most substantial functions in any business. And the longevity of an employee with an organization directly correlates with a comfortable work environment and sufficient pay and benefits.
Human Resources Roles and Responsibilities
Whether in-house or as a component of an outside services firm, HR professionals can manage a vast array of responsibilities related to the needs of a company. For example, they can manage the hiring processes, including recruiting and interviewing potential candidates and overseeing orientation and training.
They are also responsible for:
- Overseeing employee and employer relationships
- Completing payroll
- Managing benefits
- Corresponding with an organization’s leadership to implement policy changes
- Establishing a safe environment where employees feel valued
Human resources can be managed either in-house (such as an HR department) or outsourced to an HR firm or agency.
What is a Human Resources Department?
A human resources department within an organization oversees and organizes all things relating to employees. And the HR department must work with leadership and staff to reach these goals.
Note – a general rule of thumb is that an organization should hire just under 1.5 HR professionals per 100 employees.
Pros and Cons of Having an In-House Human Resources Department
1. You can more easily develop a healthy company culture.
You can create rapport and improve worker engagement through in-person conversations. For example, suppose your HR department knows employees personally. In that case, the staff might feel more comfortable bringing up challenges that they’re facing.
2. You can attain insight and maintain control over internal routines.
Having an in-house HR team helps to secure confidential information, observe employees’ productivity, and reduce unethical practices. Also, you’re able to gain insights into attrition, ensuring that you keep your best talent.
3. Reliable, on-site assistance is accessible.
You’ll be able to resolve issues more quickly and keep your business on track, resulting in smoother operations.
1. In-house departments can incur higher costs and expenses.
In-house HR departments require a lot of time, workforce, and resources that the organization might not have.
2. You may have difficulty finding the right person for the job.
3. Internal relationship bias may exist.
What is an Outsourced HR Agency or Firm?
When your company outsources human resources, that means that an outside organization handles various HR activities and responsibilities for your organization. The business may discover that they’re limited in managing the ins and outs of HR. HR firms specialize in many of the same functions of a human resources department.
Which Tasks Can You Outsource?
It can be challenging to determine which tasks you can effectively outsource. Ask yourself, “What role do I want HR to play in my business?” And “Can you handle HR roles and still provide your other services for operation and profit?”
Tasks that you can outsource to an HR firm include:
● Payroll and related tax services
● Benefits administration
● Employment law compliance
● Employee Assistance Program (EAP) and counseling
Pros and Cons of Outsourcing Your Human Resources Responsibilities
1. Outsourcing can save you headcount, expenses, and time.
Outsourcing your HR allows organizations to focus on HR tasks that are critical for compliance with laws and regulations like payroll, taxes, and benefits administrations.
2. Outsourcing helps you avoid heavy workloads and focus instead on your company mission, roles, and responsibilities.
An HR firm can help you with tasks such as managing interviews, sending offer letters, and others so that you can focus on doing what you love to do best.
3. Outsourcing minimizes legal risks and challenges.
1. Your organization could sense a lack of employee engagement.
It might not be wise to outsource HR in its entirety. Outsourcing tasks correlating with numbers, spreadsheets, and reporting might be beneficial. But the human connection with employees is vital for HR, and that might be better left in-house.
2. Costs can compound quickly.
While outsourcing can save you money, it can also cost you more if not appropriately planned. In addition, depending on which sources you outsource, the prices can rise quickly.
3. Distance between your organization and the HR firm.
Employees might find that it’s more challenging to communicate with an offsite agency.
So, Should You Outsource or Keep it In-house?
When determining if you should outsource or keep your HR in-house, it’s good to look at the size of your organization.
Small and medium-sized, or growing, businesses
Outsourcing often works best when a company isn’t large enough to run its own HR department. You might not have the resources to run the other departments required to integrate with HR (like IT support). There are also complexities you might not be able to handle, like tracking shift differentials, overtime, and pay cycles.
However, as you grow, remaining compliant becomes a more significant concern. Often, growing businesses will have an HR manager and may need to add to their HR team.
Medium-Sized and Large Businesses
As you scale, recruiting becomes a top priority. And challenges arise with hiring remote workers to stay in compliance. At this point, you probably need an in-house HR team. You’ll more than likely have the resources to run payroll. You can also probably staff computer programming and IT support departments to integrate HR with the rest of the business. But there are still many HR tasks that can stay outsourced to avoid bogging down your employees.
While there are pros and cons to hiring an HR agency or keeping everything in-house, how to manage your HR isn’t an easy decision to make. It would help if you considered various factors, including determining your resources and identifying how large your company is. After that, it can take time to decide how to proceed. But managing your workforce and all employee-related matters is one of the essential components of an organization. So if you’re looking for support with solutions for human resources, call us today! At Belfield Management Solutions, we aim to help take your business to the next level of success!