Why outsourcing HR makes sense

The reasons for using the services of an HR professional are many and varied. They generally revolve around seeking, selecting, retaining or removing employees. The conditions when HR support should be sought, and some of the challenges faced by SMEs, are considered below.

Business growth could trigger the need for HR services. A business owner may need to free up their time by using an HR professional to manage job applications, conduct interviews, check references, and systematically reduce large numbers of applicants down to a few final recommendations.

Business growth could also lead to more strategic input requiring specialist expertise for the likes of induction planning, restructuring, succession, changes to contracts, redundancies and compensation evaluation.

Staff turnover is costly for any company but the impact is especially significant for an SME. HR expertise can help to effectively define and implement a total reward package to attract and retain employees. When it comes to employee satisfaction, financial reward isn’t always the key driver and a HR professional can act as an impartial interface between workers and management.

Employee engagement is often overlooked. HR professionals can offer invaluable guidance in this fundamental aspect of job satisfaction which ensures that employers have robust procedures in place to identify, understand and address any issues. With correct training, engaging managers can facilitate and empower staff, rather than control or restrict them.

Future-proofing. In cases not involving gross misconduct, where it’s necessary to issue warnings to employees, it’s important that those warnings can legitimately form a foundation for potential future action. Many SMEs will issue warnings without going through a recognised disciplinary process. Such warnings cannot be relied upon to base a dismissal and leaves the employer exposed to an unfair dismissal claim.  The risks of warning or dismissing an employee inappropriately – even with less than 2 years’ service – could lead to scenarios where aggrieved employees instigate claims against employers.

Grievance management. In the interests of ensuring an objective and legally fair process of grievance- or dispute-management, a 3rd party independent HR expert can investigate a grievance, consider the evidence and decide the outcome.

HR professionals can offer employers expert advice on wrongful dismissal, discrimination, exerting a statutory right or whistleblowing; enabling an employer to decide on a course of action which doesn’t leave them legally or financially exposed.

Cost-effectiveness. A medium-sized company may need the services of a full HR department with a director, manager, generalist and recruiter. An internal HR department is costly. Outsourcing HR functions is an affordable way to gain access to specialised expertise that might not be needed on a daily basis.


West HR specialises in outsourced HR services for small businesses.  Get in touch with us to discuss your needs.

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