What You Need To Know When Outsourcing HR

What You Need To Know When Outsourcing HR

As your business grows and you hire more staff, you might find that you’re spending more time doing HR related tasks. As a result, you will have less time doing what you do best – working with your clients. If you need HR support or are thinking of switching to a new provider here is a guide of what you need to consider: 

The first thing you need to do is make a list of all the HR services you need, such as employment contracts, HR policies & procedures, e-HR, appraisal & performance management. Think through all the tasks that you are doing that you might need support with to create as comprehensive a list as possible and try to anticipate further tasks you may need in the future as your company grows.

When evaluating potential providers make sure you consider:

1. Quality of service provision
Check to see whether or not the people supporting you are suitability qualified and experienced. Are they members of the Chartered Institute of Personnel and Development [CIPD]? This is the professional body for HR and Learning and Development Professionals and members are required to adhere to a strict professional code and standards. Have they worked in Human Resources and to what level? Have they worked at HR admin level? This may be sufficient if you just need administration support but if you are looking for management level guidance unlikely to be much help. Personal recommendation is a good guide to quality of service. Ask your accountant or solicitor or a trusted advisor if they can recommend someone. Check out the supplier’s website and any testimonials.  

2. Retained Service - Length of Contract
You should know if there is a fixed length of contract with the provider. Do you wish for support all year round or for a few months? Perhaps you may need support for one-off occasions. Consider what options companies offer and select the one best suited to you.
NB: Some of the ‘market leading’ providers insist on long-term contracts [Typically 5 years duration] and make it impossible to break the contract without hefty penalty clauses.

3. Integration
You need to consider how easy & quick transition to the new provider will be. Do they require you to use a specialist HR system which might be difficult to learn? The process of introducing HR support to your company should be a seamless - are there any potential roadblocks which could prevent this?

4.    Price
Understanding your budget and selecting providers that can operate within that budget is important, but don’t just choose based on price alone – cheapest is unlikely to be the best and may not be the most suitable. 
If you have an existing provider you will need to give them formal notice of termination, usually in writing, and an appropriate notice period.

If you are thinking of outsourcing your HR get in touch with Human Capital Department to see how we can help you


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Please contact us if you have any questions about people management & development and see how we can help you.