The Secret Weapon of Startups: Outsourcing HR

Posted by Creatiq Support | Wednesday, June 21, 2017

The Secret Weapon of Startups: Outsourcing HR

Posted by Creatiq Support | Wednesday, June 21, 2017

Forbes magazine gloomily states that  90 percent of startups fail.  This could be because of imperfect
products, poor planning and a lack of continuous improvement. Forbes magazine
also states that successful entrepreneurs don’t work in their business, but on
their business. An easy way to improve a company’s efficiency and operations is
through outsourcing HR responsibilities, such as recruiting and payroll
administration, to third-party service providers.

Enhanced Focus

Entrepreneurs and small business owners often spend a bulk of their time on
activities that do not generate revenue. This includes training, risk planning,
employee benefits and tax administration. They need to focus on business
profits and core competencies is one of the most common reasons for outsourcing
internal functions to experienced professionals. Mobile, cloud and
communication technologies allow startups to expand faster than ever, but
long-term success depends on stable development with adequate support. 
Poor hiring practices can ruin any organization, so using a third-party to
handle HR decisions and functions will increase stability and minimize risks.

Cross-functional Capabilities

Startups and small businesses may find that the Internet and technology
allows them to quickly operate at a national or international level. While this
is a dream come true to most entrepreneurs, they may not be ready for global
expansion and they may lack the appropriate resources. For example, a small
business may need to hire additional staff and consultants for remote
locations. Tax, labor and business laws will be different from state to
country. Rapid, local development may also create the need to immediately hire
workers to keep up with unexpected market changes or consumer demands.

Better Technology

Businesses prefer to outsource certain functions, such as HR and accounting,
because it eliminates the need to buy servers, software and equipment. Most HR
outsourcing organizations use cloud-based technology that easily accommodates
any rate of growth. The best HR service providers will offer complementary or
inexpensive live and on-demand webinars and e-learning opportunities. HR firms
will likely use the most comprehensive technology solutions to help their
companies with everything from talent management, OSHA regulations and labor
law compliance.

Startups and small businesses that offer streamlined recruiting, training,
payroll and benefits will be much more likely to attract and retain the best
workers. HR outsourcing may help your company quickly and safely scale while
containing costs and reducing HR liabilities.