Top 5 HR Functions Businesses Outsource

Although outsourcing HR functions is a popular option for businesses of all sizes, there is still some confusion about how it works. Some businesses are reluctant to outsource HR functions because they believe they’ll completely lose sight of this integral part of their operations. In reality, outsourced HR solutions should not replace a HR department, nor should they lead to a complete relinquishing of control, but are in fact intended to complement your current offering.

Speaking broadly, HR departments tend to deal with absolutely anything and everything that has to do with people within a company. This can lead to your HR function managing a lot of tasks that take considerable amounts of time and energy away from those activities that provide real strategic value for your company. Even worse, smaller businesses see senior management personnel take it upon themselves to keep track of all aspects of staffing, resulting in increased risk and a lot of wasted time and effort. 

Outsourcing elements of your HR offering can ease the pressure while ensuring you’re always acting compliantly. The big question is, what should you hand over to an external partner? We’ve pulled together the top five HR functions that our clients outsource to P3 People Management and the reasons why.

1. Employee contracts and handbooks

What starts out as something business owners and managers want to take responsibility for can quickly become a time-consuming headache, not to mention a legal minefield. One of our clients once admitted they wasted two solid weeks attempting to draft their own employee contract before realising the task was too large and the risk of getting it wrong was too great. There are also those who buy an off-the-shelf template online, which can be problematic as it isn’t tailored to your specific business, and often not even to the industry in which you’re operating.

Once you’ve nailed the perfect contract and employee handbook, there’s also the small matter of changing legislation which can lead to your documentation being out-of-date. An outsourced HR professional will be able to conduct a full review of your current contracts and handbooks and update them accordingly, or, if you’re starting from scratch, they can obtain a detailed overview of your business and put together all of the correct documentation you need.

2. Training and development

People are surprised when they find out a high number of businesses outsource their training and development needs. After all, don’t you want to develop your own staff and be responsible for their growth? Of course you do, but it’s not that simple. The truth that a lot of businesses are reluctant to admit is that there just aren’t enough hours in the day for learning and development to take priority. That’s not to say business owners and HR managers don’t care, it just requires time dedicated to designing and executing a development plan for each employee and ensuring they stick to it rigidly.

There’s also the added aspect that the role of a nurturing teacher might not be for you. We’ve worked with a number of clients who are passionate about their team and want them to develop within their company, but feel awkward when it comes to spending time fostering careers. There’s no shame in it, that’s why you appoint professionals who can put together a training programme that’s bespoke to your business.

3. Disciplinary and grievance support

Speaking of awkwardness, there’s an abundance of it when it comes to dealing with disciplinary or grievances within a business. No one enjoys it and we often have managers approach us stating that it’s the most challenging aspect of their role. Following the correct procedures is the easy part; the challenge comes with delivering the relevant message in the correct way in the hope it achieves the right results. There’s also the added aspect of finding the time to conduct an investigation properly and thoroughly to ensure all risk has mitigated, which can be challenging for even the biggest HR departments.

You don’t have to outsource all aspects of grievance and disciplinary. For example, some of our clients use us for the occasional more complicated issue whereas others outsource any and all investigations. A reputable HR partner will always ensure all of the facts have been gathered and that your policies are adhered to, while taking an active role in any formal meetings to consider both the commercial and legal impacts for your business.

4. Employee metrics

In today’s business world, data is absolutely key when it comes to improving business efficiency and operations. Collating and managing this data in one place is the Holy Grail, especially when it comes to absence and holidays, compliancy, performance management and reducing risk. One client we work with originally approached us because they were exasperated by a self-implemented five step process for employees booking time off that required paper forms, spreadsheets, a shared calendar update and an email confirmation. Needless to say, the system often fell down at various stages due to user error, meaning data was often lost and holidays went unrecorded. While this may not sound like a big deal, imagine a process this admin heavy for every aspect of staffing. How do you keep track?

Outsourced HR providers offer solutions to help you keep track of your employees and effectively manage data. Ours is called ‘My HR Partner’, which is an end-to-end automated HR data management system that provides our clients with complete data management and instant access to employee data so that any HR issues can be dealt with quickly. We even offer an employee self-serve module where staff can request holidays and time off and even manage their personal objectives, which we developed to help our clients finally eliminate paper forms for good.  

5. Performance management

It may be one of the most critical HR processes, but it is often one of the most under-utilised. Much like the problems that can arise when businesses hold on to their own training and development when they are ill-equipped to do so, poor performance management can have a detrimental effect on overall business performance. Effective performance management is a continuous cycle and should incorporate performance improvement, development and managing behaviour delivered through continuous conversations between employee and manager.

Clients we’ve spoken to have found that outsourcing performance management to HR professionals who are conversant with changing legislation has had great benefits for their employees. There’s also the added aspect that their employees feel more satisfied that their performance is being evaluated objectively and are more inclined to accept their weaknesses in the constructive manner they’re intended and therefore make greater effort to improve.

It’s important you look closely at what your business is currently managing in-house and how outsourcing could benefit you from both a time and cost perspective. And if you do decide to use an outsourced HR professional, make sure they are reputable and have a firm grasp on what you do and the industry in which you operate.

At P3 People Management, we want to produce real results and deliver clear ROI, which means we’ll never work with a business if we know we’re not the right fit. For a free, no obligation chat with our team, get in touch today and we’ll do everything we can to help and advise you.