Why startup should outsource their HR Function
As a founder you are wearing many hats, your priority is to grow the business and keep costs at a minimum.
On average, founders in small businesses spend about 18 hours a month on HR-related tasks and for founders who also handle payroll themselves, the total time goes to almost 40 hours a month.
That’s a huge amount of time for founders who already have multiple priorities to manage.
Your HR needs to change as you grow and the complication of people management also multiplies with the growth.
HR Function For Early Stage Startups (Less than 10)
When you have a small team taking on HR responsibilities makes good financial sense as there may not even be enough work available to necessitate hiring a full-time HR employee.
But what you need at this point is a strong HR Foundation to build the right culture.
Building the desired culture in the organisation is very critical which is much simpler to implement in the beginning so you need to get your HR policies and manuals in place.
For a growing Small Business (11 to 50)
When you cross 10 and move towards 20 employees many compliances start getting applicable to business and it is important that you need to start getting your compliance right.
The question is whether to create that expertise in-house or outsource it, ideally at this stage creating in-house expertise would be costly and time-consuming and as founders something which is not your core business you should not try to do it in-house.
Getting one resource in-house who can manage the entire HR function is impossible.
HR Function for established Small businesses (50 plus employees)
With 50 plus team members, there are several HR tasks which need to be prioritised, Employee Onboarding, Contract, Performance Reviews, Employee Engagement and of the course hiring process.
This is the time you should look for an onsite HR person who can focus on areas like Employee Engagement, Performance reviews, Mentoring and coaching to managers and employees.
If you do not want to add headcounts in HR you can have a combination of important activities in-house Like Recruitment, Employee engagement in-house and all operational activities like HR operations, Payroll and compliance outsourced to the right HR partner.
At Emgage, We help Startups and SMEs to simplify and streamline Human Resource Management.
For more details, you can reach out to us at https://emgage.work/contact/