Outsourcing Human Resource Management for Startups
A Startup company is a company in its early stage of development; it is also referred to as a new business that has the intention to grow. A Startup is a young company founded by one or more entrepreneurs to develop a unique product or services and bring it to the market. It has been researched that start up have high tendency to fail because they are faced with high uncertainty and floods of competitors. Nevertheless some of them go on to be successful and influential.
Here are some of the factors that cause startup companies to fail:
- Lack of skills needed for the business
- Weak team, poor leadership
- Poor marketing
- Lack of proper strategy
Looking deeply into these reasons, I can say that everything points fingers at LACK OF REQUIRED SKILLS. Human (Employees) are the greatest asset of an organization. In today’s dynamic and continuous changing business world, it is the Human asset that differentiates an organization from its competitors. Today’s knowledge economy distinguishes one organization from another with the single most important and power factor that is Human Resource (HR) or Human asset.
It is known by business decision-makers that the skills of employees, account for 85% of a company’s assets so it means that effective human resource management is very much essential for the growth of every company or organization be it big or small.
Human resource management (HRM) is a process which is used to recruit and manage people within the organization. The responsibilities of the human resource management department include selection, recruitment, training & development, providing orientation, maintaining good relationships, employee performance management, taking healthy and safety measures, scheduling meetings & conferences and delegating tasks among the teams to maximize the performance which will ultimately contribute towards the organizational growth.
Human resource management (HRM) plays a pivotal role in the development of organization or business and it is the backbone of every organization. When done properly, human resource management creates a huge difference in improving the employee’s productivity at the workplace.
Here is the good news; for startup companies chocked up with a lot of core responsibilities and inexperienced in the Human resource Management field and has the urgent need to work with the right hands, it is therefore advisable for them to outsource their Human resource management functions. The benefits of doing this includes:
- Cost Saving: Overhead costs associated with performing HR services are typically very high. A fully-functional HR department requires additional office space and highly trained and experienced HR staff. Many startup companies simply can’t afford this expense. Once the HR services are outsourced, you can easily avoid overhead costs. Moreover, outsourcing costs are variable and can be expanded or reduced according to your business requirements.
- Employee Development: Outsourcing HR functions can help you manage employee performance and development. HR providers implement performance management plans to ensure employees comply with company policies and procedures and successfully meet your business goals. Outsourcing firms periodically monitor employee performance and report findings to management. This reduces the workload of your managers by minimizing their administrative responsibilities.
- Risk Management: Employment and labor laws change regularly, and it can be difficult for you to remain up-to-date on regulations that affect your workplace. Outsourcing firms employ HR professionals whose purpose is to stay current on federal and state employment laws. This will help you comply with these laws and avoid costly lawsuits brought on by employees. HR firms also maintain and audit company policies and practices to ensure your organization and your employees’ best interests are protected.
- Efficiency: Maintaining an efficient and productive workplace is critical. Outsourcing HR functions creates greater efficiency within human resources systems. Advanced human resources technology utilized by outsourcing providers, helps streamline important HR functions such as payroll, benefit administration and compliance management. Outsourcing helps you and your managers spend less time on paperwork and more time dedicated to improving the efficiency and effectiveness of your workforce.
The benefits of Outsourcing Human resource management cannot be overemphasized, for Startup companies looking at saving cost and rapid growth in the business world, outsourcing HR functions can be really advantageous.