Outsourcing HR? What you need to know

February, 11, 2021 by Vera Gavizon author workhoppers

small company people working

As a small business entrepreneur your main focus is to reach the market with the best sellable product or service. You might have started your company with a partner or two and have hired employees as needed. Most likely your attention is focused on growing your business with a tendency towards production, sales and marketing and very little time to spend on HR related matters.

Eventually, issues concerning human resources start to pop up and there is a moment when you ask if hiring a dedicated Human Resource expert is needed? What would be the cost? Do you really need a full-time employee? Or would outsourcing HR to a freelance expert solve the problems. To answer these questions, we sat down with a professional freelance HR expert to get some advice and tips.

Caroline works full-time as People & Culture Manager. She finds the time to moonlight as a consultant. She is passionate about helping small organizations, mostly high tech startups, build their policies, programs, recruitment strategies and more. Caroline is always excited to help small businesses by applying best practices procedures learnt from working in large corporations.

When to Outsource HR to a freelance expert?

Startups can start operating with 1 to 10 full-time employees. At that point, the most important HR function required is payroll. It is quite common to outsource the payroll to your accountant or to a specialized company that will process it on time and precisely. But HR is not only about payroll, HR challenges go from recruiting, defining compensation packages, describing job responsibilities, creating employee handbooks and more. As these challenges start to surface you might be able to improvise and cover them with the help of your current staff. But there is a moment that restrictions of time and limited knowledge demands an expert.

Hiring a full-time HR professional is costly and your size might not justify it yet. Industry reports recommend hiring a full-time staff for companies with 40-50 employees. Caroline suggests that once you reach 80 headcounts you are due for a Head of HR on a full-time basis.

If you have not reached this size yet, you might want to consider outsourcing your HR functions to a professional on part-time or on a project basis. By hiring a freelancer you benefit from their expertise at a fraction of the cost.

Value of outsourcing HR to a freelance professional

There is no question that an HR consultant can help the founders get it right from the beginning. Thanks to a freelance HR expert, the cost of implementing the different HR requirements can stay in budget. You might want to hire a freelancer that specializes in recruiting and onboarding new hires and use him(her) only when there is a need to hire someone. You might also convert every HR function into a project to be outsourced to a freelance consultant on a contract basis.

Caroline has helped small businesses build policies, define compensation packages and benefits, create employee handbooks, analyze and resolve high turnovers, ensure compliance and even create the right morale for the company to operate.

Hiring a freelance HR professional provides you with the expertise and allows you to focus on growing your business with the right people.

An additional benefit of hiring a fractional head of HR is for your employees to have someone to go to with their concerns.  As Caroline puts it “ employees need a confidant to chat with about their workplace experience and companies need to have someone with the right skills to listen.”

Find the right freelance expert to outsource your HR function

It is important to define the necessary skills required in a good HR consultant before you start your search. Here are some of the skills we suggest:

– Excellent communication and people skills

– Particularly good negotiation skills

– Positive attitude 😊

– Professional manners

– Good organizational and administrative skills

– Good listener

– Strong ethics

You might want to find someone that has had experience in large companies and knows the best practices. However, it is important to make sure that the HR expert has also worked in smaller organizations. Knowing best practices is important but they most likely need to be adjusted and understand the dynamic of small organizations.

Getting references from a friend is always a good idea. But if you do not have the network to find the right person, we suggest you try any of the freelance marketplaces to find the right expert to outsourcing HR functions.

outsourcing HR to freelancers

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