Outsourcing Your Human Resource Needs.
An Article By: Dinah Bailey

Many small to medium sized organizations aren’t in a position to have a full time human resource role within their company. This could be due to the:

• Size of the organization - as the business grows, even then some companies still can’t justify the cost of having a full time in-house HR function
• Demand or awareness of the need for an HR role - many may not realize the HR compliance requirements that are associated with running a business
• Cost dedicated to having someone fill such a role on a full time basis when perhaps the needs are only occasional - may feel it’s not worth the cost until the company grows to a certain size

A viable alternative that many organizations are turning to is outsourcing the strategic HR function to a Human Resource Consultant who can fulfill the role on a part time or “as-required” basis.

The Benefits

Human Resource Consultants provide a variety of HR related solutions such as:

• Recruitment and Selection - for key positions where the demands of day-to-day activity preclude a senior manager from taking on a detailed search
• Policies and Procedures - putting structure around basic policy and procedures can be a time consuming and difficult task which can be handled more efficiently by an outsourced specialist. For example vacation, sick leave, recruitment, orientation, etc
• Job Descriptions - the experience of a seasonal professional can put structure and substance around such detailed requirements
• Employee Performance Management - an extremely important area that can again be structured in an effective manner by a seasoned professional
• Standard forms including Offer Letters, Non-Competes, Vacation Requests, Performance Appraisals, etc – when the need becomes more frequent, timely expertise is required in this area
• Orientation Programs for new hires - again, can be a time consuming activity that can be outsourced
• Outplacement services - when conducted effectively, can result in a departing employee feeling better about the circumstance they are in

When considering whether to outsource HR functions, consider the organization’s goals and strategies and ensure the human resource needs are in alignment with these goals. In this process, it’s a good idea to complete a SWOT Analysis (Strengths, Weaknesses, Opportunities and Threats) prior to bringing an HR professional on board. Or better yet, have the HR Consultant assist in this process to prioritize the organizational needs and determine how the HR function can be strategically allied in achieving these goals. This step will assist in determining where the company wants to go and how the outsourced HR component can help in getting there.

The Rewards

Outsourcing HR services can:

• Help reduce costs by bringing in an experienced professional when needed for key tasks or on a project to project basis
• Ensure HR processes are being dealt with effectively, consistently and incompliance with statutory requirements (i.e. Privacy Act)
• Assist with organizational growth since the cohesive support of employees and HR is a critical element in the potential success of the organization
• Maintain effective manager/employee relationships – especially important in a non-union environment or where diverse functions don’t get the opportunity to communicate on a daily basis with others
• Allow employees and management to do their jobs while someone else focuses on the HR elements

When considering the addition of using an outside source for human resources, keep the lines of communication open with employees and ensure their commitment to the process, as this is a significant change in processes. The seasoned HR professional can be very supportive and effective in handling this transition.

Human Resource services can be grouped together or custom fit for one-off requirements/projects as required. The best option is to have an HR Consultant dedicated to the organization and retained on monthly basis. So no matter what the need or issue that arises, there is always someone available for support and guidance. This way, at a moderate cost, the small to medium sized organization has professional expertise “on staff” without the total overhead cost of a full-fledged HR department.

Choosing to outsource the human resource role is a major commitment as well as a convenience. Get the right fit for the organization and ask for references.

Too many smaller organizations ignore the need for HR until it’s too late and they find themselves in litigation situations because of a poorly handled situation with an employee.

Good employees come from good policies, which recruit good people and provide effective training. This leads to better direction of skilled employees, bringing the best out of their contribution in a healthy and communicative environment.

Dinah Bailey is the principal of HR ByDESIGN. Dinah has over 10 years experience in human resources and administration. She is an honours graduate of Sheridan College’s Human Resource Management program and is a CHRP Candidate. Dinah is a member in good standing of the HRPAO and The Mississauga Board of Trade. Alberta Venture E-Awards recognized Dinah for her outstanding contributions to workplace excellence through ‘Quality of Working Life’. Contact HR ByDESIGN at 905-452-8813 or visit on line at www.hrbydesign.ca.

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