Bay Area HR Consulting FirmEvery business with employees must have an HR function.  Human Resources Management’s (HRM) purpose is to gain competitive advantage by executing a strategy to develop and retain a highly committed and capable workforce.  The deployment of a sound HRM strategy requires human resources planning, a strong recruitment and selection process, consistent performance management that also supports learning and development, and a system that allows for monitoring and evaluating the HRM strategy’s effectiveness.  Not only does HRM maximize employee productivity, but it also prevents legal risk as well as workplace drama that can lead to a toxic work culture.

Businesses that do not have the need or means to support a fully resourced internal HR department, and that have not had the time to develop a thoughtful HRM strategy, typically attempt to piece the function together by merging HR-related tasks into an existing position.  Often, it is the finance position or a highly capable office manager who ends up taking on aspects of the HR function, creating a hybrid job where an individual must split their time and attention between other administrative duties and the complexity of managing HR-related tasks. Wearing too many hats or hiring inexperienced staff to manage the HR function in a business can be overwhelming and oftentimes important legal compliance, regulatory issues, or other best practices are missed altogether.

Human resources and HRM strategy should be seen as the backbone of organizational strategy; therefore, reducing the HR function to a few tasks that are required to operate a business, such as running payroll and ensuring I-9’s are completed will not help a business achieve HRM related competitive advantage, nor will it fully mitigate legal risk factors.  In many organizations, placing too much responsibility on employees by expecting them to manage HR along with other functions can lead to information overload, overreliance on certain individuals, and potentially costly employment claims that are time consuming to address.

Small and medium sized organizations may not have the resources to appropriately staff and support internal HRM.  Large organizations also may need support because of the degree of complexity that comes along with a higher number of employees. While a larger organization, may have internal HRM, most HR generalists are not able to address some of the more complicated and non-routine organizational dilemmas that can arise and that require more specialized expertise. Examples include toxic organizational culture from poor training of managers and supervisors, highly complex leaves with overlapping laws, or dealing with wage and hour inequities due to a lack of an appropriately structured compensation system.  Regardless of company size HRM strategy and support is important.

Given the range of issues that organizations of all sizes may face, considering outsourcing aspects of the HR function or even the entire HRM to an experienced HR consulting firm is a good strategy for taking pressure off business leaders. HR Consulting firms, particularly a Bay Area HR Consulting firm, will have a staff of seasoned professionals who are familiar with the complexity of California employment regulations, which can provide peace of mind. A good consulting service will be able to help with strategic initiatives, handle HR compliance, address employee grievances, perform day-to-day HR tasks, ensure hiring and onboarding are well executed, mitigate overall employment related risk, and help businesses develop an overall people or HRM strategy. Outsourcing also ensures that your team is able to focus on their core functions and duties.

There are several other compelling reasons to consider outsourcing some or all aspects of your company HRM.

HR Consulting firms with seasoned HR professionals bring immediate HR expertise to your business who do not need training, significantly increasing efficiency and reducing costs when it comes to HR strategies such as recruitment and hiring, employee onboarding, and developing a staffing and succession plan. Outsourcing often reduces costs because of the economies of scale a consulting firm can offer.

Organizations that choose to manage HR processes internally, will need to hire a dedicated in-house HR team to undertake these complex processes, once the organization reaches a certain size. There are several costs associated with hiring and maintaining an in-house team including salary and benefits. In the current labor market, finding and hiring experienced HR practitioners is a challenging and time-consuming process. Once hired, the new HR manager may need several months to build processes, procedures, and update policies before being able to become an active contributor and partner to the leadership team and business strategy. In addition to the costly ongoing salary and benefits of internal HR staff, there are other expenses to appropriately support an internal HR function.  Additional expenses include paying for access to the appropriate resources the HR team needs to maintain and expand their professional knowledge, implementation and maintenance of a human resources information system to warehouse employee records and important metrics, a subscription to an applicant tracking system for recruitment purposes, and other systems to manage and monitor performance and compliance.  Given the costs associated with internal HR support staffing and systems, outsourcing can be much more cost effective and could result in up to a 20% savings.

Staying updated with ever-changing employment and labor laws can be an uphill battle. This is especially the case for small business owners who have enough on their plate and juggle multiple tasks. Besides, the inability to keep abreast of policies and changes in regulations can result in non-compliance and hefty penalties.

Outsourcing your HRM function should give you some peace of mindthat your outsourcing partner will ensure adherence to guidelines. Experienced outsourcing professionals are well aware of the consequences of non-compliance, and thus they take compliance seriously and stay on top of changes in employment law. Your provider’s team will also maintain and audit company policies and practices and recommend changes as required.

Many organizations’ biggest benefit from outsourcing HR functions is freeing up leadership’s time to focus on the core mission and service of the business operations instead of having to keep up with the details of legal compliance issues.

The Personnel Perspective is a leading Bay Area HR consulting firm. We take the guesswork out of HR management. Our ability to develop customized outsourcing solutions for our clients sets us apart. To make an appointment, call (707) 576-7653.