Save Thousands on Your Human Resources Costs!
- April 9, 2019
A Human Resources (HR) department is essential for all organizations irrespective of their size and industry. While some companies are large enough to support a full-time Human Resources position, many small companies do not have the budget or needs to require permanent Human Resources staff. In such cases, an external HR Consulting Service can be of immense benefit to small businesses. There are several advantages to hiring an external HR Consultant, the most important of which includes having a positive impact on your company’s bottom line. An impact that has the potential to save an organization thousands in annual HR related costs.
Below we look at how 1 simple strategy has the potential to save your organization thousands in annual HR related costs.
Outsourcing Human Resources Consultants often gives your business access to HR Professionals who have more specialized knowledge and are more experienced than your own HR staff. As a small or medium sized business, the cost associated with hiring an in-house Human Resources Professional could be between 50K – 100K or more, depending on skill level and experience. Small business budgets would likely be no greater than 50K per year. Ultimately, you get what you pay for, and a salary of under 50K would support an unseasoned HR Professional with limited experience. Without greater experience, this would potentially require you to still outsource HR advice.
Dependent upon your unique business needs, however, with an external HR Consultant, costs are sporadic and used as needed. This could place your total annual HR costs at far less than the cost of an in-house HR Professional. One approach may be to outsource HR functions first and, as your business grows and as part of your contract with your provider, they recruit in-house HR employees who can continue the great work they began.
As a business owner, your workplace space costs money. By not having your HR Professional in-house, not only do you save on HR related costs, but you save your space for an employee that has the expertise to generate revenue for your business.
At a time where millennials are job-hopping every couple of years and recruitment costs are rising more than ever, it makes good business sense to have and external HR Consultant on retainer. Attracting the right talent is huge for the success of your business. The process of hiring a new employee involves a specific process, which costs both time and money. Typically, when an employee leaves an organization there is not a replacement readily available. It could take 6-10 weeks to find the right candidate and an additional 3-4 weeks to train the new staff member. Even if you hire temporary staff during the recruitment process, you still have to train them as well. It’s a very long and painful process. Small businesses can’t afford to waste financial r esources on ineffective recruitment strategies and employee turnover costs; therefore, an external HR Consultant can help you in creating an efficient workforce while saving your organization thousands through minimizing your cost-per-hire.
Lets face it, even HR Professionals can be absent from work for short and long periods of time. Whether the absence is due to vacation, sick days or short and long-term disability, you will need back up staff to cover the absence. As a result, it makes good business sense to have an alternative staff member that can jump in and cover all the requirements of your absent HR Professional. This requires either hiring a second HR Professional or training another staff member to cover the daily responsibilities of an HR Professional. Once again, this practice will reduce your revenue stream. Training someone to cover for the absence of an HR Professional cannot be accomplished in a day or a week. There are multiple avenues of Human Resources that need to be learned eg; Employee Relations, Recruitment, Compensation, Benefits and Retirement Plans, to name a few. All good business leaders know how critical it is to have staff trained to cover absences. Having an external HR Consultant on retainer and readily available will help reduce the cost of absenteeism.
Time costs money! Having an external HR Consultant on standby allows for the flexibility of 24/7 availability, ensuring you more time to focus on better managing your day-to-day operations. The specialized knowledge that external HR Consultants offer also establish best practices. In turn, you save time and money by having consistent answers to employee questions, faster. Experienced outsourced HR Consultants can also deal with processes more effectively, reducing the time that employees spend on their HR related procedures so they can spend more time on their designated roles.
5. Legal Costs
In the unfortunate circumstance that an employee sues for wrongful dismissal or an employee brings a sexual harassment action against your company, an external HR Consultant can provide you with advice on how to move forward with minimal harm and liability. As a smaller company, workplace law can be challenging to navigate in the best of circumstances, all while dealing with the added pressure of simultaneously running your business. Having an external HR Consultant readily available can be vital for an organization when faced with legal challenges while eliminating or reducing extensive legal costs in the process.
Perritt & Associates HR Consulting specializes in all avenues of Human Resources, creating the right HR Strategy for your organization. Our continuous goal is simple – to transform businesses through their people.
Contact us at www.pnahr.com for HR advice worth repeating.