Outsourcing HR services doesn’t just save time for a company’s employees—it can actually directly contribute to a company’s bottom line. Companies focused on human resources have the time and leverage to develop all kinds of tricks to save your company money.
Ways Outsourcing HR Saves Money
- Cheaper benefits—One of the biggest benefits of outsourcing HR services is the deals they can receive on benefits. Because large HR outsourcing companies have many clients, they can negotiate prices with insurers that typically only very large organizations can get. Receiving better benefits for a lower price by outsourcing HR saves money and keeps employees satisfied.
- Maintain fewer salaried employees—Doing HR in-house requires paying a salary and benefits to a whole team of employees. Most companies pay less by outsourcing HR than they do in paying those salaries, plus all the fees associated with having an employee. Outsourcing HR allows companies to keep a slimmer team focused on the company’s core business.
- Lower costs—Companies with in-house HR must foot the bill for every individual function of that department. Everything from employee training and recruiting to the software the employees use to do their jobs costs money. Companies that provide HR outsourcing services provide all these things in one package. HR professionals at an outsourcing firm are more efficient at performing things like training events, and bundling services helps companies save money.
- Clean up mistakes—Every employee can make a mistake once in a while, but errors made in the HR department can incur large penalties. A simple mistake in payroll taxes or salary withholding can incur huge fines from the IRS. Failing to properly train employees on harassment issues can lead to costly lawsuits. Companies that operate in multiple states also have to keep up with local labor laws, or they can face fines for violating them. HR outsourcing firms have large teams with a variety of specializations. Because these HR professionals focus on one specific task, they don’t make the same mistakes that an employee juggling multiple jobs could make—ultimately saving your company money on fines and liability.
- Streamline—HR outsourcing companies can do more than just push paper; they can also help your company with long-term strategy. Outsourcing HR can help companies streamline all their HR processes and leverage assets to make the most of their workforce.