Outsourced HR Services can be the Ideal Solution … Sometimes

Outsourced Human Resources Services or fractional HROs are a cost-effective stopgap solution for companies if:

You can’t justify the cost of an HR Superstar. 

HR Superstars are few and far between—they’re in high demand, expensive, and rarely available at a discount. They play key roles in driving corporate culture, carrying out executive initiatives and steering their employers through various compliance minefields, ensuring growth and workforce stability.  However, if you have less than about 1000 employees, it’s usually cost prohibitive to hire one of these HR superstars so you end up taking a chance on an HR leader who lacks experience or has little or no track record of competency, but is willing to take your below-market salary.  This is usually a more expensive solution in the long run, especially for employers with high turnover, union shops, or goals for near-future expansion. 

While it is particularly risky to skimp on HR experience when filling an HR role, you don’t need this HR superstar full time, particularly if you have junior HR staff who are handling recruitment and much of the day-to-day tasks.  Sharing an HR star (or CHRO) with other companies gives you the benefit of their experience for a fraction of the cost of hiring the person full-time.  When CHRO provides fractional HR services, we not only ensure compliance with the myriad labor laws, but we also support and train your current HR team boosting their skillset and value to your organization so that when you are ready to hire an HR superstar, they walk into an HR department with competent support staff, and established workflows tailored to your business. Explore our services for more information.

You have significant turnover in your HR Department or HR staff on leave:

HR is a challenging profession, often plagued with emergencies and never-ending requests.  When you expect your HR team to juggle increased demands until you can justify the cost of adding a new team-member, you’re inviting burnout which leads to turnover or extended leave requests.  Outsourcing some HR functions, even intermittently, takes some of the load off your overworked team, and often gives them the benefit of a fresh perspective on issues that may have seemed overwhelming or impossible.  In this case, outsourcing helps you preserve and empower your team.

If you want to discover the weaknesses in your current HR function and how to overcome them, complete our diagnostic questionnaire for a free assessment of your company’s HR function.

Your HR team is learning HR on the job:

This is common in smaller or family-owned companies—until they figure out that this strategy is often more expensive in the long run because of labor law noncompliance and avoidable lawsuits or agency actions.  This approach also sets up your current HR staff for failure resulting in unnecessary turnover and a bumpy transition because there are minimal processes or procedures that allow the replacement to pick up where their predecessor left off.  In this situation, it is more cost-effective to retain an expert to help you on a part time basis to mentor your current HR staff, establish effective HR procedures that fit your company and industry, and provide you with a stable base from which to grow.

You have locations in, or employees working from, multiple jurisdictions:

If you have employees in multiple jurisdictions there are numerous labor laws to comply with which can become even more complicated based on your industry.  HR staff who need to navigate federal laws and only one state’s labor laws often become overwhelmed with ensuring overall labor law compliance, but when you add in multiple states and localities with various workforce protections, it becomes increasingly challenging for your HR team to keep up with the legal intricacies of each jurisdiction, particularly when dealing with an HR bottleneck.  Outsourcing your employee relations, labor law compliance or leave administration, or providing additional outsourced HR leadership, allows your HR team to focus on their day-to-day priorities while ensuring your company remains in compliance.

Discover how CHRO can help boost your current HR function and get you closer to achieving your goals by visiting our services page. Complete our company diagnostic for a free assessment of your current risk, and solutions available.