8+ Reasons to Outsource HR: Save Time, Reduce Costs, and Build Value

CoAdvantage- Outsourcing HR offers numerous advantages for businesses both big and small. Some of the benefits are obvious: gaining time, saving money, and improving the organization’s overall competitive posture. But other advantages might surprise you. The bottom-line is that outsourcing frees the employer to get down to business rather than shouldering HR issues in addition to revenue-generating activities. But how does that translate into real-world value?

Here are 8+ ways outsourcing HR can strengthen your organization’s ability to conduct its business successfully.

1: Outsourcing HR lets employers focus on core, revenue-generating business activities, which is the key reason over half (57%) of organizations outsource. How good do you want to be at doing things that don’t make you money? Let others handle those tasks. (Deloitte)

2: To that end, outsourcing is indeed a time saver. HR work can consume 25-35% of a small business owner’s time. They can end up spending as much as two full days a week on manual administrative work. (Small Business Administration, ServiceNow)

3: Over two-thirds (67%) of employers find outsourcing successfully helps them develop new capabilities, including automation, reporting functions, process excellence, and improved customer experience. (Deloitte)

4: 55% of companies outsource in order to improve compliance and reduce legal risks according to a recent study by (SHRM)

5: Outsourcing HR in particular can also uplevel your HR performance. World-class HR teams are nearly twice as likely to outsource key functions – like recruiting, payroll, and benefits administration – as average-performing HR teams. (The Hackett Group)

6: And world-class HR operations really perform well. They see 72% fewer transactional process errors, serve 66% more employees per HR FTE, and take 22% fewer days to fill open managerial roles. They also spend 33% less on HR per employee and have 41% lower labor costs in general. (The Hackett Group)

7: Outsourcing can yield cost savings in all kinds of areas. Companies that outsource payroll handling, for example, save 18% on average more than those who do it in-house. Altogether, 88% of organizations successfully reduce costs when they outsource. (PwC, Deloitte)

8: Outsourcing HR can help you keep up with your competitors. Since 2008, the compounded annual growth rate of the Professional Employer Organization (PEO) industry is more than 7 percentage points higher than the comparable growth rate for the U.S. employed labor force. Given the power of PEOs to reap huge benefits, it’s no wonder. Outsourcing can claim that competitive advantage for your own organization. (The National Association of PEOs).

Are these reasons not enough? We’ve got more. Here are a dozen different benefits from outsourcing, including the fact that outsourcing some HR functions allows in-house HR staff to focus on strategic, value-generating activities.

CoAdvantage, one of the nation’s largest Professional Employer Organizations (PEOs), helps small to mid-sized companies with HR administration, benefits, payroll, and compliance. To learn more about CoAdvantage’s ability to create a strategic HR function in your business that drives business growth potential, contact us today.