Forbes magazine gloomily states that 90 percent of startups fail. This could be because of imperfect products, poor planning and a lack of continuous improvement. Forbes magazine also states that successful entrepreneurs don’t work in their business, but on their business. An easy way to improve a company’s efficiency and operations is through outsourcing HR responsibilities, such as recruiting and payroll administration, to third-party service providers.
Enhanced Focus
Entrepreneurs and small business owners often spend a bulk of their time on activities that do not generate revenue. This includes training, risk planning, employee benefits and tax administration. They need to focus on business profits and core competencies is one of the most common reasons for outsourcing internal functions to experienced professionals. Mobile, cloud and communication technologies allow startups to expand faster than ever, but long-term success depends on stable development with adequate support. Poor hiring practices can ruin any organization, so using a third-party to handle HR decisions and functions will increase stability and minimize risks.
Cross-functional Capabilities
Startups and small businesses may find that the Internet and technology allows them to quickly operate at a national or international level. While this is a dream come true to most entrepreneurs, they may not be ready for global expansion and they may lack the appropriate resources. For example, a small business may need to hire additional staff and consultants for remote locations. Tax, labor and business laws will be different from state to country. Rapid, local development may also create the need to immediately hire workers to keep up with unexpected market changes or consumer demands.
Better Technology
Businesses prefer to outsource certain functions, such as HR and accounting, because it eliminates the need to buy servers, software and equipment. Most HR outsourcing organizations use cloud-based technology that easily accommodates any rate of growth. The best HR service providers will offer complementary or inexpensive live and on-demand webinars and e-learning opportunities. HR firms will likely use the most comprehensive technology solutions to help their companies with everything from talent management, OSHA regulations and labor law compliance.
Startups and small businesses that offer streamlined recruiting, training, payroll and benefits will be much more likely to attract and retain the best workers. HR outsourcing may help your company quickly and safely scale while containing costs and reducing HR liabilities.
