Most business owners agree that their employees are their most valuable assets. As such, managing human resources has become a critical role in managing a business. Yet for some businesses, the various functions of the HR department are too comprehensive and complex to maintain in-house.

Keep in mind, there are several HR specialty areas, including payroll, recruiting, benefits, compliance and more. In some businesses, an HR generalist may be asked to perform more than one of these HR functions, and that can often result in less than optimal results.

In these situations, a business can achieve the same level of efficiency and workforce management by joining a professional employer organization (PEO) and outsourcing HR. The benefits of outsourcing HR are plentiful and can have a significant impact on your bottom line.

Here are 8 advantages of outsourcing your HR functions.

1. Save on your costs

Overhead costs associated with performing HR services are typically very high. A fully functional HR department requires additional office space and highly trained and experienced HR staff. Many small businesses simply can’t afford this expense and find that it’s more cost-effective to outsource HR functions. Outsourcing HR helps reduce your costs and helps you avoid trying to financially maintain non revenue-generating back-office expenses. Furthermore, HR outsourcing costs are variable and can be reduced when business needs warrant.

2. More efficiency

Maintaining an efficient and productive workplace is critical. Outsourcing HR functions creates greater efficiency within human resources systems. Advanced human resources technology utilized by outsourcing providers, helps streamline important HR functions such as payroll, benefit administration and compliance management. Outsourcing helps you and your managers spend less time on paperwork and more time dedicated to improving the efficiency and effectiveness of your workforce.

3. Compliance help

This is one area where many small businesses really struggle to keep up, especially with the changing laws pertaining to hiring, insurance claims management, and benefits regulations. The greatest challenge is that failure to comply can lead to serious financial consequences. Outsourcing HR functions to a trusted provider can help you understand and take action to comply with these laws and regulations.

4. Risk Management

Employment and labor laws change regularly, and it can be difficult for you to remain up to date on regulations that affect your workplace. Outsourcing firms employ HR professionals whose purpose is to stay current on federal and state employment laws. This will help you comply with these laws and avoid costly lawsuits brought on by employees. HR firms also maintain and audit company policies and practices to ensure your organization and your employees’ best interests are protected.

5. Health Insurance Benefits

As our economy improves, employers are looking for ways to incentivize and motivate their staff. PEO firms provide small employers the unique opportunity to offer their staff a robust and comprehensive array of employee benefits that are typically available to only the largest corporations. These robust offerings include a wide range of major medical plans and voluntary benefit offerings.

6. Global Talent

One of the great benefits of outsourcing is expanding your perspectives. When HR functions are outsourced to PEO companies, you get your HR services performed by the best talent around the globe.

Need help outsourcing HR functions in Africa?

Africa HR Solutions offers tailor-made HR outsourcing services according to your African payroll needs.

Top benefits of using our solutions:

  • Multiple countries, currencies and legal entities on a single platform
  • Complex payroll structures, any type of reporting, split costing structures and automated customized journals
  • Variance reporting to cross-compare any period for any payroll element
  • Automated payment processing to employees, creditors and statutory authorities with reconciliation to the General Ledger
  • Full HR suite with approvals, records and reporting
  • Employee self-service for records retrieval and personal detail updating