Outsourced HR services play a vital role in the modern workplace. As unbiased mediators, HR teams help maintain a healthy, productive culture across all levels of a business.
Many businesses opt to hire HR professionals to be a part of their business, acting as an internal team. This allows you to build an HR team tailored to your business needs. In contrast, external HR uses a specialist company that provides expert support whenever required.
After looking into the pros and cons of each HR type, you start to understand that each one provides different benefits, meaning you can choose based on which will help your employees most in the workplace.
Internal HR
With internal HR, many companies enjoy the stability of having a fixed team that can help them with their HR needs. By running this team within the company, they can gain a better understanding of the business’s culture and adapt strategies to fit it best. This approach can be beneficial to larger companies, as more people means more interactions and working relationships that may require HR assistance. This can create an increased frequency in conflict, so having a team on hand can be very helpful.
Many people trust internal HR more than external HR. The idea behind this is that information remains within company walls, ensuring confidentiality among relevant parties. While this belief sounds right on paper, HR professionals, both internal and external, are bound to the same laws around confidentiality.
On the other hand, many people don’t trust internal HR teams. This is because they believe that operating as a part of a business leads the team to be potentially biased towards senior leaders in the company. People may refrain from speaking out against certain higher-ups due to fear of losing their jobs. It doesn’t help that no specific laws prevent this kind of behaviour.
External HR
Why bring in an outside team to help with your HR issues? For one, an internal HR team may reach a point where they lack a reference point from conflicts in other businesses and industries. Solutions from internal HR teams may come from a narrower perspective compared to external teams who work with a wide range of businesses. Having a HR team with a diverse range of experience can help your company tackle internal conflicts with greater efficiency. With outsourced HR services, businesses benefit from experienced professionals who’ve supported a wide range of industries, enabling quicker conflict resolution and more balanced decision-making.
Is having outsourced HR an unnecessary cost to the business?
One of the biggest concerns people have around external HR services is their cost. Even businesses that lack an internal team believe they can handle employee issues alone. This belief that HR is redundant increases the chance that situations are mishandled. This potentially creates accusations of discrimination and malpractice. While businesses may be concerned about unnecessary spending, the cost of lawsuits and settlements is much greater.
As mentioned earlier, many people have concerns about coming forward to HR groups. External HR companies are much more independent from the authority that may impact the work of an internal team. By working with an independent team that understands industry-wide challenges, businesses gain access to broader insight. This kind of external HR support can help you resolve internal issues more effectively. People view outsourced HR as more impartial.
At People Matters, our HR services come in various packages, including various additional services. This means our clients not only get our expert HR insights but also tailored services to promote growth and development within their business. Choosing outsourced HR services over building an internal team can offer not only impartiality and scalability but also cost-effective access to seasoned HR expertise.