HR Outsourcing: A Smart Move for Small Business

Originally published on Racine County Eye June 10, 2020

“To win the marketplace, you must first win the workplace.” 
-Doug Conant, former CEO Campbell Soup Company

Business owners know that people are their greatest asset but too many businesses don’t invest enough thought or money into making sure they hire the best people.  Even if they are lucky enough to hire the best, they may not be doing enough to insure they have the right experiences while they are employed.  I know it’s not from a lack of desire, it’s often from a lack of time or knowledge about how to recruit, manage, and retain in this economy. 

Most small businesses just don’t have the ability to hire a dedicated person to take care of all things people related.  Too often the tasks generally associated with a human resources person are split between many people or ignored all together.  I understand why this happens.  Small businesses have to be cost conscious and spend the same dollar in lots of places.  More inventory might be more important than paying to send the office manager to an HR training. Unfortunately, this is an area where saving a few bucks now, can lead to huge costs later.  HR is one area where it is a mistake to not spend the money to do it right.

Let’s start with hiring.  If you have jobs going unfilled – or even worse, filled by the wrong person – you are losing money due to not being able to service the needs of all the customers.  You may also be burning out existing staff who are wearing too many hats. Worst case is you are creating a toxic environment that will drive your best employees away because nobody wants to work with mediocre or downright toxic co-workers.  Did you know that the cost to backfill a position when someone leaves can be as high as 2-3x the cost of the original person’s salary especially if they are in a customer-facing role? If the person was especially liked by customers, you run the risk of your customers following their favorite frontline person to their next place of employment. Can you afford for this to happen? This is why your focus needs to be on retaining everyone once you do hire.  Creating an environment that helps you retain employees is a core skill area for HR.

What happens when you do have an issue with an employee due to a bad attitude or poor performance?  You have a few choices of how to handle it, but at some point you have to look in the mirror and ask yourself if you set them up for success by training them correctly so they had the ability to hit the bar you were expecting them to hit?  Did you clearly communicate along the way that they were or were not meeting expectations?  Did you consider putting them on an improvement plan with clear objectives and expectations, so they had a chance to course correct?  If not, you did them and yourself a disservice in a world where good employees are hard to find. These are all areas of improvement for you as an owner or manager that you need to fix before making your next hire so that you can avoid a negative outcome as well as create a loyal long-term employee through careful career development.

Speaking of negative outcomes, small businesses get sued for HR issues all the time and they are the least equipped to handle it.  Every termination has a risk of getting a letter from the state labor board.  Not following timeclock and meal procedures right can land you a big wage and hour claim violation. Every workers comp claim could lead to an OSHA review of safety and cleaning procedures.  Even hiring one person over another can lead to legal action if you are not objective and following the same process for every single applicant.  These are HR areas that most people who don’t do HR as a core part of their business fail at and it ends up costing the business in money, productivity, and reputation more than it should.

So, what can a small business do?  They can outsource the HR tasks to an experienced vendor that specializes in these things so that the owners, managers, and employees of the small business have a resource to turn to, so they don’t lose focus from their core business.

When you hire a company like Polaris Talent you get a strategic HR partner that is only ever a call or text away from guiding you through any HR situation you have.  We can run your hiring for you by posting the ad, screening all the applications and only passing along the handful of well qualified people that you should talk to.  Polaris Talent are experts at hiring passive applicants and reaching out to them. This means you’ll get a better caliber candidate than just relying on job ads. We’ll guide you as you interview, making sure you are asking questions that reveal if the person really has the skills and fit that you are looking for while helping you avoid asking illegal questions that may lead to disparate hiring accusations.  When you have an employee with an issue, you pass them to us, and we’ll handle the employee relations piece and report back to you.  This saves you time and prevents you from saying or doing anything that may lead to issues later.  We’ll also handle the things that take a lot of your time to research and prepare like employee handbooks and policies.  We will audit all of your employee records to make sure you are in compliance and are low risk for penalties and lawsuits.  If you do have to let someone go, we’ll be right there with you making sure everything is properly documented and executed so that you can reduce your odds of a letter from the labor board. 

As you can see, there is a lot more to HR than just hiring.  Not every company will need to hire, but every company everywhere needs HR as soon as they have more than just the original founder or owner.  You might have thought of outsourcing before but changed your mind due to costs.  Polaris Talent has solved this for you with a flat rate monthly subscription fee that is based on the number of employees you have.  It’s cost effective when you are small and grows with you along the way.  The monthly fee is all-inclusive of HR and hiring and is significantly less than the cost of hiring someone.  Call us today for an assessment of your needs and a custom quote before you lose another good employee or dread that letter from the labor board.