A Commentary by Wendy Ferguson – BHRLR, CPHR – Ferguson HR Consulting
During the past two and a half years, most companies in the energy sector have undergone major corporate restructuring and many have been forced to downsize to reduce costs just to survive our economic climate. Some larger organizations’ HR departments have been annihilated, relying on the few HR staff and business managers remaining to absorb many HR responsibilities. In smaller organizations, this usually translates to the business owners taking on all HR tasks. Outsourcing the HR function can alleviate some of this pressure and free up resources so your focus can remain on your core business.
1. Cost Savings: Employing an HR department is costly (often consisting of an HR Manager, Payroll, Recruiter, Health and Safety Specialist, etc.). Many organizations realize this is just not feasible. It may make more sense to work with an external HR Business Partner to support your organization’s strategy. By investing in exactly what you need out of an HR department you will greatly reduce your overhead costs. Outsourcing HR will enable a lean organization to continue to utilize the expertise of an HR department, without the added costs of employing one. Keep in mind that outsourcing HR will allow a smaller organization to access the same level of HR support that would normally only be available to larger organizations.
2. Compliance: Your external HR department will work with you to ensure you are compliant with federal and provincial employment and human rights legislation. Considering the threat of lawsuits and penalties, outsourcing the risk is a smart choice that can help you avoid costly business consequences
3. Recruiting for Positive Corporate Image: Recruiting top talent is a speciality. Organizations that do not have the in-house expertise should turn this critical function over to a company that has the experience required to perform this function well.
If you haven’t already read my article called, “The Dehumanization of the Recruiting Process in Alberta”, I highly recommend you check out the link at the end of this article and then read the 100+ comments made by random readers in order to grasp today’s candidate experience. One of my specialities is recruiting, and with certainty I can tell you that many organizations are falling short in their recruiting practices. Companies may not even know they are being misrepresented to future employees and customers.
Anyone who has recruited before knows that the process is incredibly time consuming. Unless you have a dedicated recruiter(s), this task has the ability to take over days and weeks of a staff member’s time. I recommend aligning yourself with an external HR team that sees themselves as your business partner, who understands your business and represents it properly.
4. Flexibility and Efficiency: Outsourcing HR will allow you to quickly respond to growing business demands. Aligning your business with an external HR department should provide you with efficient turn around on projects that will enable your business to succeed.
5. Do What You Do Best and Hire an HR Expert: An external HR department will allow a business to focus on their business strategy instead of getting lost in the timely administrative tasks required to run the business. Continue to do what you do best and rely on a qualified HR team to do what they do best. If you know your weaknesses, then you can optimize your strengths. Outsourcing HR allows a business to hire a consultant or a team of specialists they couldn’t otherwise afford to hire.
When is it time to consider outsourcing HR?
- When the administrative processes begin slowing down productivity (usually upwards of 15 staff)
- When you don’t have access (in-house) to the expertise you require
- When your staff and management have taken on HR responsibilities that they are not qualified for or do not have time for
- When you are rebuilding the organization after downsizing
When should you hire an HR Manager? Experts say when an organization reaches 80+ staff, it is time to hire a full-time HR Manager, however you may still rely on an outside firm to provide consulting services such as payroll or recruiting.
Recently, Deloitte’s 2016 Global Outsourcing Survey found that as far as future opportunities for outsourcing go – HR is one of the areas that stands out, with a predicted growth of 32%. Outsourcing has the potential to make your organization leaner, more adaptive, smarter and more profitable. However, it must be done with much consideration. Take your time and really think it through and only hire the best fit for outsourced talent. Ultimately, your external HR department’s goal should be to support your business to succeed, by providing you with timely and honest advice, assisting with your planned growth and preventing compliance issues.
About Wendy Ferguson
Wendy Ferguson is an Alberta based Human Resources Generalist and Consultant with over 15 years of combined experience in the areas of HR, Business Administrative Management and Marketing.
She has worked within a broad range of industries, including: oil & gas, architecture, law, information technology, engineering, accounting and business consulting firms. She works with companies on both a full time and part time consulting basis to help them address their HR management, recruitment and policy needs.
She is also a Chartered Professional in Human Resources (CPHR). CPHRs are uniquely qualified to help you achieve your business goals. With proven expertise across nine key business metrics, a CPHR has the knowledge and the experience to address the factors that underpin the degree of your immediate and long term success.
For your HR requirements contact Wendy at [email protected]
Senior Management HR Advisory
Alberta Employment Standards