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Is HR Outsourcing Worth the Cost for New Businesses?

aso hr outsourcing hro Feb 05, 2024

As a new business, you may be reluctant to outsource your HR responsibilities. Maybe you or other employees are handling HR just fine, and the cost of outsourcing doesn’t seem worth it. But as business starts to pick up, many professionals realize the value HR outsourcing can bring, from hundreds of hours to thousands of dollars. 

Get the freedom to focus.

In new businesses, professionals tend to wear a lot of hats out of necessity. As their business grows, professionals’ time becomes torn between their job-specific functions and administrative functions. According to a Zapier survey of 1,000 knowledge workers, 18% of knowledge workers spend less than one hour per day on their core responsibilities. Some of that time is spent doing tasks that could be outsourced and done more efficiently.  

When people think “HR”, they tend to picture a combination of three functions: payroll, recruitment, and corrective action. But HR spans over 75 services, from administrative tasks to strategic planning. With HR outsourcing, you suddenly don’t have to worry about these responsibilities, freeing up everyone’s time to focus on what they do best. 

Save thousands every year.

HR specialists protect your business from hefty legal penalties resulting from non-compliance and potential lawsuits. It’s hard to know what you don’t know, but HR takes the guesswork out of compliance through comprehensive audits and proactive risk advisement. HR can also alert you to new ways to save, such as finding better benefits packages. 

Of course, many companies choose to hire an in-office HR specialist. According to the Bureau of Labor Statistics, the median pay for an HR specialist is $63,000 per year. Businesses that outsource HR can save over $40,000 per year. Not only that, but HR outsourcing can often provide more comprehensive services than a single HR specialist has the time or expertise for.  

Drive growth and let HR handle HR.

Picture yourself trying to build a race car while driving it. The race has started, and you’re behind the wheel looking at blueprints, directing your team to plug in the ignition coils and install the brakes. Someone’s hanging out the window tightening the bolts on the wheels. You might even hear the gas hose dragging alongside the car (at this point, you’re too afraid to check). But you have enough fuel to get started, and in a competitive industry, there’s no waiting around until every detail is sorted out. Still, things would be going a lot smoother if you could focus on driving while someone else took care of the infrastructure.

Similarly, while you might be able to handle HR functions on your own, the time and effort you invest is going to slow down growth and drive up costs. HR takes care of the tasks and procedures you don’t have time for so you’re free to focus on growth and improving your bottom line. No matter where you are in the race or whatever hurdles you come across, HR will be there to fuel success and get you on your way.   

Megastar HR is a growing HR outsourcing company with a vision to become the thought leader of the HR industry and the premier choice for HR consulting and outsourcing services. You’ve learned how HR outsourcing stacks up against other HR options. Now see how Megastar HR rises above typical HR outsourcing.

Legal Disclaimer: This article is for informational purposes only and is not intended to constitute legal, accounting, or tax advice and it should not be relied on as such. Contact your own legal, accounting, and/or tax advisors to obtain advice before engaging in any transaction. No one from should act or refrain from acting based solely on information provided by Megastar HR without first engaging their own legal, accounting, or tax advisors.

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