Running a business isn’t easy, and the people side is particularly complex. There are rules and regulations from various governing bodies. You need to have processes and policies in place to help the business run smoothly. And at the heart of these rules, regulations, and business processes, there are people—actual living, breathing, emotional, and dynamic humans. One change in your people practices can send waves throughout the organization.

Given the complexity of dealing with humans, you might think that HR works best in-house, but that’s not always the case. There are pros and cons to each option.


Hiring HR

PROS

  • You and every team member benefit from having someone available every day, whether onsite or remote.
  • Your HR person will experience your environment and culture daily and can be pulled into meetings that pop up, providing a strong view into everything happening across the business.
  • You can have greater influence on how the tasks are completed.

CONS

  • Depending on your budget for HR, you may be limited to the experience of one person. If there’s an area of HR or business management they haven’t been exposed to, you’ll lack focus in that direction or lose efficiency as they work to come up to speed.
  • If the person you hire leaves, you must start the training process over again for that position and may lose traction on projects or other initiatives.
  • The level of experience you can afford will be lower than what you could get with an equivalent budget at a professional outsourced firm.

If you’re considering bringing HR in house, these insights on delegating HR may be helpful.

Outsourcing HR

PROS

  • You have access to multiple, highly experienced and strategic HR professionals with exposure to the entire range of HR activities (depending on the firm you select).
  • The fees for outsourced HR are a fraction of the cost of hiring an entire HR team, or even one HR professional at an equivalent experience level.
  • You will have more flexibility in approach and bandwidth as priorities shift and business needs change.

CONS 

  • Some outsourced resources may not offer the flexibility you need when they connect with you. What will responsiveness look like in your partnership?
  • If you are working with a single consultant without access to a broader team, you may find yourself without coverage if that person takes a vacation or leaves.
  • Most HR professionals providing outsourced services offer a high level of experience and knowledge. They are likely not the best resource if your HR needs are only administrative or tactical.

As you evaluate outsourced HR options, be sure to take these criteria into consideration

What’s Best for You?

There’s no right or wrong answer to the outsource-or-hire question; it’s really what’s best for you. It’s important to consider flexibility, expertise, and cost as well as your organization’s culture and business goals. If you’d like to talk through how outsourcing HR can strengthen your business, we’re always here to help