How Small Businesses Benefit from Outsourcing HR Functions

The Asian Development Bank showed in a study that 70.6% of micro, small, and medium enterprises (MSMEs) in the Philippines temporarily closed because of the pandemic. The study also pointed out that a large majority of MSMEs reported no income and reduced revenues, as well as implemented temporary staff cuts.

Compared to large enterprises, small businesses are just starting to grow and navigate the industries that they’re in. Thus, it’s important for them to be mindful of possible costs, all while keeping their operations intact. When it comes to internal processes and employee relations, tapping a reliable HR partner can help small businesses meet their business goals.

Having an HR partner is a benefit

Outsourcing HR services can be advantageous to small businesses in many ways. For one, HR partners, who are already equipped with the appropriate skills and knowledge in HR, can handle various operations such as payroll, recruitment, training, and more. In this way, small businesses can focus on other, more pressing responsibilities outside administrative work instead of worrying about internal technicalities.

Small businesses can also reduce costs when tapping an HR expert to handle their internal operations. Since small businesses are focused on directing their budget towards marketing, production, logistics, and more, having an HR partner can make them be more financially efficient, as opposed to hiring a dedicated HR officer that may not be able to simultaneously handle many responsibilities. HR experts already have the tools to handle their clients’ needs as well, helping small businesses save on third-party resources that they may not know how to use anyway.

With an HR partner, small businesses can also save time and effort on training employees on a number of operational and personal aspects. Small businesses can outsource training requirements such as diversity training, sexual harassment training, ethics training, and more―all of which can help shape employees into competent people for their jobs. With proper training, employees can significantly contribute to the growth of the business.

Last, but not least, HR partners can help small businesses create and implement policies within their organization as they embark on challenges and new experiences. By doing so, small businesses will be able to build consistency in action and equity in employee relationships.

HR services toward business growth

Outsourcing business processes is not new among small businesses. In fact, a 2019 study reported that more than one-third of small businesses currently outsource a business process to increase efficiency and expertise, as well as seek support for accounting, IT services, and digital marketing responsibilities.

When it comes to outsourcing HR services, a 2021 study pointed out that company managers who outsource HR are more satisfied with many facets of outsourcing compared to those who don’t. They also experience more financial benefits such as reduced costs.

Numerous HR partners like Q2 HR Solutions are happy to provide services for struggling microbusinesses. Q2’s People4People, for example, can help supervise people management for operations. Also, using the Build, Operate, and Transfer or BOT platform, small businesses can reduce costs while also minimizing risks that boost business growth.

Small businesses have nothing to be afraid of—regardless of how ‘small’ they are. With the right HR partner, problems get solved, and tasks are accomplished even despite the pandemic. In the end, small businesses will grow as efforts will pay off.