# A Beginner’s Guide to Outsourced HR for Small Businesses
Small business owners wear many hats, from making executive decisions to acting as accountants and even HR administrators. As a result, they often struggle with delegating or outsourcing HR tasks, which can be complex and sensitive. However, delegating these tasks can open up opportunities for small business owners to focus on their strengths and help them become more efficient. In this article, we will discuss what outsourced HR is and its benefits for small businesses.
## What Is Outsourced HR?
HR professionals face increasingly complex responsibilities as the work world becomes more interconnected through technology. One of the most obvious examples of this is remote work. Businesses, both great and small, hire employees across international borders which can lead to compliance concerns. Outsourcing HR tasks, also called human resource outsourcing (HRO), can help businesses navigate these challenges by passing HR functions to independent third-party providers.
A company can outsource either all or some of their administrative HR duties to an outside entity. They may also need to decide between an EOR (employer of record) or PEO (professional employer organization) to navigate HR requirements in another country. Although it may take some effort to set up, outsourcing HR can offer several key benefits for small businesses, especially when it comes to efficiency.
## 6 Efficient Benefits of Outsourced HR for Small Businesses
Here are some of the most important benefits of outsourcing HR for small businesses:
### 1. Keeping Up with Regulations
HR is a regulation-heavy field. It can be time-consuming to understand all the rules and compliance concerns associated with hiring and retaining employees. You also need to invest significant effort into keeping up with those standards and requirements. Outsourcing HR takes that ongoing burden off the shoulders of a small business’s employees.
### 2. Cutting Costs
One of the most apparent advantages of outsourcing HR is that it saves money. Hiring a full-time HR professional is costly. According to ZipRecruiter, the average annual US HR salary is over $66,000. Working with a third-party provider gives small businesses access to the same skills and services at a fraction of that price.
### 3. Freeing Up Precious Time
A small business owner may decide that they can get by without a full-time HR professional on staff. In fact, that’s often the case. However, someone will still need to spend time tending to that part of running a small business. Outsourcing HR frees up significant quantities of time that can be reallocated to more productive activities.
### 4. Better Retention
Outsourced HR can have an impact on upfront efficiencies like payroll and administrative costs, but it can also improve retention. When a small business works with a third-party provider, it can provide higher-quality HR services to its employees. This helps them feel valued and well-compensated for services, leading to improved loyalty and retention, both of which have a direct impact on efficiency over time.
### 5. Access to Better Talent
Outsourced HR can improve small business efficiency by providing access to better talent. When you use an HRO partner, it gives you the confidence to recruit the best individuals for your team, regardless of their location or the complexities of hiring them. This sets up a much larger talent pool, helping you build a better, more efficient team.
### 6. Help With Scaling
Small businesses scale, and their HR needs will grow as well. Typically success comes with more hires, a larger staff, greater compliance and regulation concerns, and so on. When you have an experienced and knowledgeable HRO partner, you can address these needs without spending unnecessary quantities of your internal staff’s precious time, effort, or resources.
## Conclusion
HR is a necessary part of any small business, but it is also a complex and evolving field that requires professional attention. Outsourcing HR tasks can help small businesses cut through their organization’s HR inefficiencies and, at the same time, keep costs down, maintain quality, and onboard better talent. They can effortlessly scale internal operations when the time comes.
In conclusion, outsourcing HR for small businesses can provide numerous benefits, including cost savings, freeing up time, access to better talent, and more. By working with an HRO partner, small business owners can focus on their strengths and grow their business while leaving the complex HR tasks to professionals.
