What is HR Outsourcing?
Outsourcing Human Resources (HR) offers Kiwi businesses a practical and cost-effective solution to a complex and evolving area of business administration.
While a vital aspect of running your business, HR responsibilities are time-consuming and can quickly distract you from focussing on business activities that drive growth.
Advantages of outsourcing HR
Outsourcing HR has grown in popularity for businesses of all sizes and industry sectors. As a business owner outsourcing offers you access to advice on compliance, wages, entitlements, and leave obligations from a team of experts.
Cost savings is another key factor for outsourcing HR functions. Especially when you consider the salary for adding just one experienced person to your internal HR team could cost $100,000 or more per year.
Then you need to add annual leave, sick leave, pay increases, and other entitlements. There's also the cost of additional technology and office overheads associated with maintaining an in-house HR department.
With the resources you save outsourcing HR, you can reinvest in areas that can help you grow your business and drive revenue, like new equipment or technology to enhance efficiency and productivity, training, and headcount.
The difference between HR outsourcing and HR consulting firms
It's easy to confuse outsourced HR services with a HR consultancy. However, there’s a significant difference between both.
Outsourcing HR involves transferring your HR functions or certain processes to an external service provider like Peninsula. Our HR management services give you the support you need to manage staff confidently. We can answer your HR questions and clarify complex matters arising out of the Holidays Act 2003 and the Employment Relations Act 2000 to help you with compliance.
**The Peninsula advice team can help you with:
- Employee management.
- Disciplinary action and redundancies.
- Wages, entitlements, and fair pay.
- Annual, bereavement, sick, and other types of leave.
- Family violence leave.
- The dismissal process and documentation.
- Employee performance management.
- Managing instances of misconduct.
- Any other workplace relations matter.
On the other hand, a HR consulting firm offers project-based advice to solve specific issues. They design strategies or programs to resolve challenges, then pass this to your internal team to handle the implementation of the idea.
Improved compliance, reduced risk
When you’re a business that outsources HR, you know an expert will always be available 24/7 to answer your questions and offer advice on the best way to manage an unexpected issue.
Scalability is another way your business can benefit from outsourcing HR. As your business grows you can scale the level of support you need without the restraints of managing or restructuring internal HR employees or the expense of hiring a new employee.
Outsourcing HR allows you to seek instant advice from professionals who understand the complexities of the Employment Relations Act 2000.
From drafting employment contracts and other business-critical documentation to managing disciplinary procedures for misconduct or employee termination. Outsourced HR support ensures policies and practices are both consistent and compliant.
If a dispute such as an unjustified dismissal claim is made against your business, outsourced HR specialists can help mediate between you and an employee. They provide a neutral, third-party perspective when handling sensitive employee grievances, investigations, or workplace conflicts.
This can minimise legal risks by offering advice on complex employment issues, which can help avoid costly workplace disputes and penalties.
Meeting legal obligations
Running a business means your focus needs to be across multiple areas at the same time. This makes keeping up to date with constant employment legislation changes difficult at best. The employment relations landscape in New Zealand is always evolving.
Getting the support of outsourced HR services like Peninsula and having access to a 24/7 HR advice line can help you get immediate clarification from a team of employment relations specialists.
Award-winning technology
Outsourcing HR duties often involves having access to technology solutions. The right technology such as BrightHR Software can streamline your HR admin and processes, improve data management, and enhance reporting capabilities. You can simply track performance clocking in and out times, manage leave, shifts and absenteeism.
BrightHR Software also centralises your documentation securely in the cloud. This gives you an overview of your business operations from anywhere anytime.
The cost of outsourcing HR will depend on the size of your business and number of employees. Peninsula can help your business with complex HR and employment relations challenges. We offer advice on wages to help you avoid underpayment penalties, onboarding and documentation for new employees, and record keeping. Contact our team today for free initial advice.
This article is for general information purposes only and does not constitute as business or legal advice and should not be relied upon as such. It does not take into consideration your specific business, industry or circumstances. You should seek legal or other professional advice regarding matters as they relate to you or your business. To the maximum extent permitted by law, Peninsula Group disclaim all liability for any errors or omissions contained in this information or any failure to update or correct this information. It is your responsibility to assess and verify the accuracy, completeness, and reliability of the information in this article.