HR Outsourcing for Start-Ups: Is It Worth the Money?

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As a startup, you want to focus on business-critical activities like building your MVP, wooing investors, or sales, leaving non-core operations like HR to your aides or outsourcing them to external vendors. By outsourcing your HR operations to the right vendor, it is possible to save costs while also benefiting from the support and guidance of experienced domain specialists.

Tasks Your HR Vendor Can Handle

HR outsourcing has proven to be an effective way of rationalising costs, introducing efficiencies into HR operations, and diverting more resources into core business functions. A competent HR outsourcing partner can perform regular HR operations for a startup along with other activities essential to launching a full-fledged business enterprise like framing HR policies.

Let us examine some key ways in which a tie-up with an outsourcing vendor could be beneficial to your business.

1. Formulating HR Policies and Processes

Every company needs to have a set of well-defined HR policies to guide its actions vis-à-vis employees. One of the foremost duties of a startup is to focus on creating a comprehensive HR policy document which can drive its future actions. Formulating an HR policy requires domain expertise which is available in plenty with HR service providers. A collaboration could help you come up with an effective policy document and adhere to a consistent human resource strategy while the company continues to grow. Your outsourcing partner can also use their vast experience to lay down systems and processes to act as a template going forward.

2. Creation of an Employee Handbook

An employee handbook contains policies and procedures regarding employees and sets out the behavioural standards expected of them both in the workplace and outside. Creating an employee handbook is a tedious affair requiring lots of time and effort. An HR outsourcing firm with its large employee base and extensive domain knowledge is ideally poised to handle this task.

3. Reducing Your HR Workload

When it comes to running a business, non-core activities like HR and payroll often tend to become a burden. The issue is accentuated in startups due to limitations on resources. As a startup, you would want to channelise your limited resources tp core business activities like marketing, sales, and design and manufacturing which generate maximum value for money. Getting an external HR team to work for you can reduce your administrative workload and allow you to focus on high-value activities that are of the greatest benefit for your business.

4. Getting Attractive Benefits for Employees

Partnerships with HR service providers can help startups get attractive employee benefits packages which they would find hard to obtain otherwise. The size and budget limitations of startups are major impediments preventing them from getting attractive benefits packages directly from companies. Your HR service provider can get great deals by purchasing these benefits for all their clients and leveraging their bargaining power. Partnerships with HR service providers allows small businesses and startups to get exceptional plans for their employees.

Find an Organisation Which Offers the Right Mix of Services

The marketplace has a string of companies to choose from. But to get the most from your outsourcing project, you need to find an organisation which offers the right blend of services. Depending on your requirements, you may want to choose between a bundled package or a handpicked set of services. Rather than arriving on a decision hurriedly, go through the options in detail and select one which suits you the best.

Customisation of Services and Costs

As for the costs of outsourced services, most companies will be willing to customise these, depending on your individual needs, without stressing on a long-term contract. Some companies go to the extent of providing on-site assistance. They will also be willing to cobble up special HR support programmes depending on your requirements.

Segregation on Basis of Industry

Several HR companies also segregate their services along industry lines such as financial services, healthcare, manufacturing, retail etc. Their industry knowledge helps them set up benefits and administrative functions accordingly. Apart from industry-specific features, these vendors also have strong reporting capabilities, so you can feel assured about compliance issues.

Triple Benefit for Startups 

Growing a startup can be rewarding and exhausting at the same time. While running a startup, it is a good idea to focus on the core business and outsource non-core activities to specialists. HR outsourcing brings triple benefit for startups by ushering cost savings while simultaneously improving service quality and allowing better use of resources.

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