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5 Ways Outsourcing Human Resources Can Save Your Startup Money


With the cost of living skyrocketing, your company may need to reconsider its spending. April 2022 saw a 9% increase in inflation, the highest it’s ever been in thirty years, and it does not look like things will get better any time soon. With that being said, now is the best time for you to consider ways that your company can use to protect its future earnings and save more money.


HR outsourcing can help your company save a lot of money by preventing needless losses and boosting productivity so you can get more done with less. In this article, we will outline five ways outsourcing your human resources can save your startup money.


1. Human Resources Can Assist You in Navigating the Current People “Crisis”


The Great Resignation,” which began in the spring of 2021, is the latest workforce crisis in which more people than ever are seeking to shift jobs. The average cost of replacing a worker earning $25,000 a year is $30,614. This means if you have to lay off three individuals in one year, you have to spend about $90,000 to let them go. This goes beyond merely hiring expenses. It is the managerial time required for hiring, onboarding, and replacing new employees. 

Furthermore, you should consider the yield reduction that will occur after the departing employee leaves until the replacement is trained. Moreover, recruiting is now more challenging than ever. Therefore, production will also suffer if you run short on staff. Workers need to be persuaded to stay and not abandon ship. When it comes to fostering an atmosphere where employees are inspired, involved, and loyal, human resources consulting can prove helpful. While our company’s culture is at the top of the list, the interesting thing is that cultures do not come into existence overnight. Building a company culture requires a lot of effort. “Culture” is the culmination of a variety of positive workplace experiences, including:

-Setting high standards and expectations for your team and making sure they are upheld

-Offering competitive wages and perks

-Providing opportunities for professional development

– Putting your workers’ well-being and health first

-Creating a flexible workplace

If you are not an expert in any of these areas, an human resources consultant can help.


2. Time is Money

Although you have heard this before, time is indeed money. And if your workforce is focusing its valuable time on the wrong things, you are wasting both your company’s time and money. Too frequently, team members are unclear about what is required of them or what they should focus on daily. This lack of clarity, results in wasted time. 

As a result, you must ensure that everyone in your workforce understands the following regarding their work:

• Their core responsibilities.

• Where they fit into the company’s long-term goals.

• The steps to reach those goals, timeframe and frequency.

• Expected activity goals.

• The expected results from those activities.

A human resources consultant can assist you in addressing these issues by using the following practices:

• Time-chunked Activity Plans. This will help team members know what they’re supposed to do at any moment.

• Role and responsibility profiles. as well as main targets for all team members,

• Performance trackers and activity targets. These will help team members align their activities with the company’s main goals. This will create more targeted activities that contribute to the company’s overall success.

• Performance management systems. This will assess each worker’s performance against the company’s goals and help them meet them.


What is Productivity in Business?

The turnover rate per employee can be used to gauge a company’s productivity. Let us say you have 30 workers and a productivity rate of $75,000 per worker. In short, that means that you’ll make an extra $225,000 in revenue from a 10% increase in productivity.

In our experience, implementing these strategies may increase the time efficiency of the majority of people and enterprises by at least 10%. This allows you to get more done with less.


3. Invest in your people


Just knowing what to do is not enough. Workers need both the desire and the necessary skills to boost production. It is crucial that each team member has the appropriate abilities and is supported in those. Once again, a human resource consultant can help with implementing the proper practices, such as:

• Creating fixed, planned, and frequent one-on-one meetings to provide staff with regular feedback

• Creating a customized training program

• Creating and fixing a timed schedule in everyone’s diary for development and training


On the other hand, having a supportive company culture is what people want. Is your organization a pleasant place to work? Do you have a reputation for being inclusive? Are the people on your team passionate about what they do, or is it just work for them? Do you, in general, need to reevaluate what you’re doing to keep your employees motivated and content?

Flexible work schedules or additional childcare support, for instance, might go a long way toward fostering a connection with more commitment and devotion amongst your team. Nowadays, individuals are concerned about more than simply their pay (although it is still a very essential factor!). People want to work for an organization that shares their morals and beliefs and that provides benefits that improve their quality of life.


Boost Your Employees’ Productivity and Save Money

Although it may seem like a lot of effort (and money), paying attention to this could eventually save your business a lot of money and time. If you want to save money and expand your business, resist the urge to skip this step. A motivated and effective employee is healthy and happy!


4. Automate, Automate, Automate

In keeping with the productivity theme, a lot of the little things build up to, well, quite a lot over time. Things like budgeting your spending. Things like logging and approving holiday requests. Things like performance assessments and maintaining and updating employment information and documentation. All of these are tasks that must be done for your business. But aren’t they all just too verbose and monotonous? Aren’t they too time-consuming? And as far as things go, these are not the things that motivated you to go into business or start your company.


Human Resources Automation Software

However, there is another option that makes the whole process much simpler—Human Resources automation software. Many of the time-consuming human resources procedures that HR automates can save you a lot of time. Even better, it’s a remarkably inexpensive method of accomplishing goals. This implies that you have more time to focus on tasks crucial to increasing revenue and building your company.


5. Compliance with the Law

 And then, there is employment law. What a nightmare it is! Employment laws are continuously evolving. Keeping up with what’s happening might be challenging if it’s not your day job. You must make sure that you have all the necessary paperwork in place for your firm and your employees. This entails items like a company manual, individual employment contracts for hiring employees and managers, and most importantly, company policies for everything relating to your company. Many businesses fail when they encounter a problem because they lack a defined policy to carry out or enforce certain decisions or rulings. 


If you are not in compliance with employment rules or lack the competence of the human resources to do so, you run a very high chance of ending up standing before an employment tribunal. And that might end up costing you a lot! An employment tribunal typically costs an employer $8,500. The maximum basic compensation for an unjust dismissal action is $16,320. Compensation awards can be up to 52 weeks’ pay or $89,493 – whichever is less. Additionally, there is no cap on the amount that can be awarded for a successful discrimination suit. This does not even take into account management time, expenses, and stress.


If you just remember one thing from this manual, it ought to be to organize your documents. Now, that does not mean that you handle everything by yourself, either. Once more, a human resources consultancy may assist in streamlining the process to make it very easy. Additionally, it is affordable. If your handbooks, contracts, and rules are already established, try and find out when they were last updated. Maintaining outdated policies might be just as risky as doing without one in the first place!

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