In this article, we explore the importance of HR for every business and the benefits of HR outsourcing for small businesses. If you require any HR help, we provide an array of specialist HR solutions for small businesses, get in touch today!

It is natural for small businesses to try to minimise expenses where they can, especially if they are only just getting off the ground.

However, when budgeting for HR expenses, it’s important to carefully weigh the benefits of investing in HR expertise against the potential difficulties you may face without it. HR plays a critical role in the success and growth of small businesses and should not be overlooked.


Why is HR important to a small business?

Human Resources (HR) is crucial in organisations of all sizes, including small businesses and startups.

HR is responsible for managing various responsibilities, including recruitment, legal compliance, employee relations, health and safety, training and development, compensation and benefits, and performance management.

These are all essential to a business’s efficient and successful daily operation.


What happens if you don’t have an HR department?

Organisations without a dedicated HR department will face many challenges because of the critical role HR plays in their daily operations. Without an HR department, the burden of managing HR often falls on the shoulders of business owners or other managerial staff.

Performing HR duties without the appropriate training and expertise can be time-consuming and prone to errors. Ensuring compliance with relevant laws and regulations is usually the remit of HR, so without an HR department, small businesses may find it difficult to remain compliant, potentially leading to financial penalties or even lawsuits. They may also struggle in areas like recruitment, retention, performance management, training and development, and employee relations.

Furthermore, when business owners and managers take on HR responsibilities, they have less time to spend on their primary responsibilities and the higher-value tasks that can help drive business growth.

Overburdened managers may also find themselves at risk of suffering burnout, jeopardising their performance and well-being.


Five benefits of outsourcing HR as a small business

Outsourcing human resources tasks can be a game-changer for small businesses.

Most HR services for small businesses offer flexible service plans, allowing them to choose an affordable solution for their requirements. The value an effective HR system can bring to your business usually far outweighs the cost.

Here are just a few of the benefits of outsourcing HR for small businesses:

  1. Cost-efficient – Outsourcing HR requirements is more cost-effective than maintaining an in-house HR department for more small businesses.
  2. Time-saving – Outsourcing time-consuming HR responsibilities frees up your and your team’s time to focus on your core business functions.
  3. Expertise – Gain access to HR experts’ advice to help you enhance your HR processes.
  4. Legal compliance – A professional HR service will be up to date with the constantly changing HR laws and regulations, helping your business to remain compliant.
  5. Employee well-being and retention – An efficient HR system will help to create a positive work environment, improving employee well-being, satisfaction, productivity, and retention rates.


At People Based Solutions, we offer various HR support services to support small businesses of all sizes and requirements, from company policies, to Workplace polices, we can help you out with all your HR Policies.

Visit our contact page, or call our team on 01925 202 217 to learn more about outsourcing your HR requirements to our experts.


People Based HR