Managing HR functions like payroll, benefits, hiring, and ensuring compliance with employment regulations is nuanced and time consuming.  It’s even harder when you use multiple vendors or technologies to manage them all.

A study by PricewaterhouseCoopers stated “As a general rule, we have found that organizations tend to underestimate the true expense of processing payroll, administering employee health and welfare benefits, and managing other key HR systems and functions.”

Whether you realize it or not, these functions are costly when done in-house. And, as the business grows, their burden grows as well. With small business HR outsourcing, these functions are taken off your plate completely.

The only thing constant in life is change. And this especially holds true with government laws and regulations. Federal, state, and local laws all impact your business and are being introduced and amended at a rapid pace. How do you stay on top of them? How do you minimize your risk?

Dealing with regulations alone, the average small business owner spends at least $12,000 per year.

Even something as (seemingly) simple as how you classify employees can be a challenge. According to the US Department of Labor, more than 30% of audited companies had misclassified employees. Many of these are full-time employees that are classified as contractors.  Outsourcing small business HR services can ensure that you have a trusted partner to manage this for you.

Small Business Trends lists payroll as one of the first functions you should consider outsourcing.

There are 3 main reasons why small businesses benefit from outsourcing payroll:

1. It frees up time and resources to focus on core business functions (because payroll is tedious to handle in-house)
2. It provides access to technology and expertise that makes performing payroll more accurate and effective
3. It reduces costs and risks by avoiding the penalties that come with doing it incorrectly

Next to salary, employee benefits are one of the most important factors in employees choosing to join and stay with your company. According to a study in Harvard Business Review, 88% of respondents said better health, dental, and vision insurance would receive either some or heavy consideration when choosing a job.

The difficulty of providing these benefits on your own is cost — smaller companies typically pay more per employee than larger companies for the same coverage. Small business HR outsourcing through an HR service provider opens up a host of affordable options that lets you offer benefits on-par with companies much larger in size.

Regardless of how often you hire new employees, improving time-to-productivity is something every small business is interested in.

When up to 20% of staff turnover occurs in the first 45 days and it costs between $3,000 to $18,000 to replace an employee, setting each new hire up for success is key.

With HR outsourcing, small businesses can take traditional paperwork processes and automate them through technology. This greatly reduces friction for new hires, improves accuracy, and provides more time to focus on training for their new role.

Anything you can empower an employee to do on their own reduces the amount of work that you or someone else has to do. Small business HR services combined with HR software can help.

For tasks like viewing payroll stubs, making benefits changes, and PTO requests, utilizing HR self-service through a mobile-friendly web interface increases both employee satisfaction (because it’s faster) and yours (because you don’t have to do it).