Top 3 Benefits of Outsourcing Human Resource Functions

While there are many benefits of outsourcing your human resource functions, three rise to the top of the list in terms of actual assistance to improving your company’s profit margin. These three reasons may greatly aid your company in both efficiency and financial growth. 

Core Business vs Non-Core Business Activities

Your business has a focus. For example, if your business is an insurance agency, your main focus is to sell insurance to your customers. That activity alone is what brings in your money, and is therefore your core business activity. However, there are many other day-to-day activities that you must also attend to.

Some of those activities may consist of recruiting and hiring agents, handling employee benefits, and payroll processing to include computing payroll taxes. These are non-core business activities. The good news is that you can outsource these job functions. 

Outsourcing the non-core daily functions of your agency will greatly free up your time, allowing you to do more of what brings in the money, selling insurance. This can increase your annual profits, which is why it tops our list.

Cost and Time Savings

Using our earlier example of insurance agency, imagine for a minute what your knowledge specialty is. Selling is most likely what you are best at. However, being good at selling doesn’t mean that you are proficient in other areas, such as payroll.

This means that you would have to hire additional staff to be sure that the payroll and taxes for your agency were handled correctly. Additional staff requires time for recruitment, training, and management. Staff also expect to be paid, which can take a toll on your net profit margin.

Outsourcing once again can come to the rescue. Once you select your human resource outsourcing partner, they handle it from there. 

Capital Expenditure Savings

If your company handles all non-core tasks with employees, then space and equipment can quickly become issues. Not only do you have to provide these people with office space, which requires a larger building for your business, you also have to furnish them with desks, chairs, computers, and phones.

All these capital expenditures also take a toll on your bottom line. Outsourcing alleviates the need for more space, and can actually help you minimize the space you already need.

There are many more benefits to outsourcing your human resource functions, but unfortunately not enough space to list them all here. If you would like more information on all the ways that utilizing an outsourcing partner could aid your business, please contact us