Should You be Outsourcing or Insourcing your HR? - performHR

Along with haircuts, HR is high on the list of activities that shouldn’t be left to just anyone. This leaves most businesses with two options. Should your business be managing HR matters with a dedicated internal professional or department, or should you consider HR outsourcing in Sydney to meet your current and upcoming needs? Here’s what to consider when weighing up both sides of the coin.

The requirements

HR is far from just hiring and firing – it can range across employment relations, workplace reviews, workplace investigations, workplace mediation, employment policies and structure, diversity, ethics, training and more. You’ll need to search far and wide to find a single HR professional who is capable and experienced in all of these areas. You might not be able to effectively cover all bases even with a whole team of people.

The right external HR provider, on the other hand, exists purely to meet these needs. You’ll have the benefits of a sizeable team whose job is to stay updated on legal obligations and best practices when it comes to recruitment, training and employment relations.

The resources

Insourcing can cost far more than outsourcing over the long term when you consider the cost of recruiting, hiring training and retaining the right HR staff – unless your business has grown to the point of needing HR professionals full time. On one hand, you can plan and budget for the costs of an internal HR team ahead of time, but if your team is underutilised you could be paying for someone to sit around and twiddle their thumbs. With a HR outsourcing strategy you can scale services up or down as needed – a flexibility which isn’t always so easy to find with an internal team.

The perspective

With an internal HR team you’ll be working with people who are in your business on a daily basis – they’re likely to understand the culture, the needs and the ‘rhythm’ of your workplace. But this can sometimes backfire when it comes to handling matters in an objective and professional way, particularly when it comes to having difficult or sensitive conversations with colleagues.

HR outsourcing provides a fresh and impartial perspective to your HR matters that can be beneficial for your team – but, it’s important to note that the quality of the service provider is critical.

A high calibre HR provider will work to understand your unique culture, objectives and HR environment to provide personalised solutions. The wrong HR provider will simply make a mess of things!

Ultimately, the choice of whether you insource or outsource your HR needs will depend on your distinct requirements, resources and approach to HR. A mix of insourcing and outsourcing might even be best suited, with ad hoc support from an external team when and as needed.

If you’re not sure yet of what you need, we can help you navigate your decision. A performHR strategy session can help to identify the weaknesses and opportunities in your HR strategy and structure and develop a roadmap for strategic human resource management that will be tailored to your current and future needs.

“HR is far from just hiring and firing”

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