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When Should Startup Start Considering HR Outsourcing as Part of its Business Growth Strategy

As the founder of your startup company, you will often have to cover multiple area of the business to keep business lean and mean. However, as the business grows, more resources are required to support the business activities. Outsourcing allows your business to build capability and give you the flexibility to scale up or down on your growth following closely to the market movement. Below are some scenarios on when you can leverage on various areas of HR outsourcing.

1.      When you are spending more time managing HR Administration

It is a fact that as a business owner, you will have to wear multiple hats, from being the founder, the CEO, CFO, HR Manager, Payroll Administrator to customer service officer. And when you start to spend more time managing HR administration and resolving HR problems, you are taking away time for revenue generating activities. And this will slow down the business growth. When you outsource HR, you pay someone else to deal with the HR tasks and that free up more time to work on your actual revenue-generating functions.

Areas of recommended HR Outsourcing

  • Payroll, Leave administration, Employment Legislation Advisory

2.      When you are expanding your team

At this stage, your company may not have sufficient HR tasks for a full-time HR personnel but the HR related activities continue to increase. Recruitment activities like posting job advertisement, screening resumes, arranging interviews can be time-consuming for you even if it's just hiring a few new employees. A HR Consultant will come in handy to manage these HR activities, and also mapping out essential HR processes (e.g. Leave policy, company culture and structure, working schedule, onboarding documents, etc.). This will also provide good foundation for your HR practices for company growth.

Areas of recommended HR Outsourcing

  • Payroll & Leave Administration, Employment Legislation Advisory

  • Recruitment, Employee Handbook, Compensation & Benefits, Performance Management, New Employee Onboarding Experience

3.      When your HR knowledge is no longer sufficient to manage HR related problems

As your company expands with increasing number of employees, the HR operations become more complicated. From keeping yourself updated on Employment Legislation, managing complicated payroll calculation to retaining employees. And you would probably have hired a full-time HR person to manage the administrative work. Outsourcing part of your HR can allow your in-house HR to focus on building key HR capability like talent management, employee engagement, and bench-strength planning that help drive growth.

Areas of recommended HR Outsourcing

  • Payroll & Leave Administration, Employment Legislation Advisory

  • Employee Engagement & branding, Talent Management, Training & Development Planning, Bench-Strength Planning

4.      When you find staff productivity decreasing

You and your employees may be drained both mentally and physically after a period of accelerated growth. And you tend to observe higher turnover rate, lower productivity and less motivated staff. A HR Consultant can provide fresh HR practices and perspective, allowing you to either creating a more sustainable work-life balance or inject a fresh dose of stimulant for the new hyper growth.

Areas of recommended HR Outsourcing

  • Employee Branding & Engagement, Talent Management, Organisational Development, Compensation & Benefits, Bench-Strength Management, Training & Development Planning, Leadership Coaching

5.      When you plan for new growth area

Companies may reach a plateau after a period. Revenue has been consistent. And you are starting to seek new growth area and want to leverage on existing resources to drive the new growth. You probably have formulated a growth strategy and seeking your internal HR team to draw out the organisational transformation plan. At this point of time, the HR Consultant will be able to augment your existing HR team by providing valuable insights and implementation experience.

Areas of recommended HR Outsourcing

  • Talent Management, Training & Development, Organisational Development

  • Recruitment Process Outsourcing, Contingent Workforce Management


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