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HUMAN RESOURCES

Should You Hire or Outsource HR?

As your business grows, you face a slew of employee compliance and legal issues. So what's the right time to bring HR on board?

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Dear Evil HR Lady,

I run a small business with around 45 employees. I'm in the restaurant/retail/convenience store industry. We are looking to keep expanding the food end of our business with more restaurants. From what I have been reading my company is supposedly right in the sweet spot for outsourcing HR. I want to provide the best for my staff while remaining profitable enough to grow my business and have an edge on my competition. What are your thoughts on outsourcing HR?

--Planning ahead

You're right to be thinking about adding HR to your staff. At 45 people you're on the cusp of being subject to more regulations and you need help. Additionally, hiring, training, and managing people becomes more and more complex with more people (because you can no longer do it all yourself), and it just makes good sense to have someone who is an expert in that area on board to help you out.

But whether that role is in-house or outsourced really comes down to what you are looking for.

If you want someone to be your right-hand man, advising you, handling problems instantly, and participating as part of your planning team to help figure out the best way to develop the staff to handle a changing workload as the business grows, you probably want to hire someone directly.

If you're more concerned about complying with regulations and laws (the more employees you have, the more concerned you need to be), while you still handle most of the employee issues directly, outsourcing is probably your best bet.

If you want someone who can multitask and take on HR as well as oversee other functions, then you want someone in house.

If you are comfortable with most problems being solved by a call center or email, then outsourcing is the way to go.

There isn't a right or wrong answer, here. In fact, your best solution may lie somewhere in the middle. One thing I would strongly think about is doing a hybrid approach: hiring someone part time to be a business partner, helping you with planning, staff development, and hiring, and then work with an outsourcer for your benefits, employee handbooks, and legal compliance.

This is actually more doable than you might think. There are quite a few experienced, intelligent people out there who would love the opportunity to have a meaningful, challenging part time job. It gives you the advantage of having expertise on staff without breaking the bank. Additionally you gain the advantages of an outsourcer (such as the ability to quickly analyze exactly how a new regulation affects you).

But, in the end, it comes down to what your business needs and how you want to approach it. You do need HR on board at this point, if just to be the person responsible for making sure you're complying with employment laws, and so it's a great time to analyze the role you want for HR in the future and plan around that.

IMAGE: Getty
Last updated: May 22, 2013

SUZANNE LUCAS spent 10 years in corporate human resources, where she hired, fired, managed the numbers, and double-checked with the lawyers.
@RealEvilHRLady




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