What is HR Outsourcing?
Outsourcing Human Resources (HR) and employee relations offers businesses a practical and cost-effective solution to a complex and evolving area of business administration.
Being a business owner or manager, HR responsibilities are time-consuming and can quickly distract you from focussing on business activities that drive growth.
Advantages of outsourcing HR
Outsourcing HR has grown in popularity for businesses of all sizes and industry sectors. As a business owner outsourcing offers you access to advice on compliance, modern awards, enterprise and industrial agreements from a team of subject matter experts.
Cost savings is another key factor for outsourcing HR functions. Especially when you consider the salary for adding just one experienced person to your internal HR team could cost $140,000 or more per year.
Then you have to add annual leave, sick leave, pay increases, and other entitlements. There's also the cost of additional technology and office overheads associated with maintaining an in-house HR department.
With the resources you save outsourcing HR, you can reinvest in areas that can help you grow your business and drive revenue. Like new equipment or technology to enhance efficiency and productivity, training, and headcount.
The difference between HR outsourcing and HR consulting firms
It's easy to confuse outsourced HR services with HR consultancy. However, there’s a significant difference between both.
Outsourcing HR involves transferring your HR functions or certain processes to an external service provider like Peninsula. Our HR management services give you the support you need to manage staff confidently. We can answer your HR questions and clarify complex fair work obligations to help you with compliance.
The Peninsula advice team can help you with:
- Employment relations and employee management.
- Disciplinary action and redundancies.
- Wage rates and entitlements based on your industry's modern award.
- Annual, long service, bereavement, and other types of leave.
- Family and domestic violence leave.
- The dismissal process and documentation.
- Employee performance management issues.
- Managing instances of misconduct and gross misconduct.
- Any other workplace relations matter.
On the other hand, a HR consulting firm offers project-based advice to solve specific issues. They design strategies or programs to resolve complex challenges, then pass this to your internal team to handle the implementation of the idea
Improved compliance, reduced risk
When you’re a business that outsources HR, you know an expert will always be available 24/7 to answer your questions and offer advice on the best way to manage an unexpected challenge.
Scalability is another way your business can benefit from outsourcing HR. As your business grows you can scale the level of support you need without the restraints of managing or restructuring internal HR employees.
Outsourcing HR allows you to seek advice from professionals who understand the complexities of Australia’s Modern Awards, Industrial and Enterprise agreements, fair work obligations and National Employment Standards (NES).
From drafting employment contracts and other business-critical documentation to managing disciplinary procedures for misconduct or employee termination. Outsourced HR support ensures policies and practices are both consistent and compliant.
If a dispute such as an unfair dismissal claim is made against your business, outsourced HR specialists can help mediate between you and an employee. They provide a neutral, third-party perspective when handling sensitive employee grievances, investigations, or workplace conflicts.
This can minimise legal risks by offering advice on complex employment issues, which can help avoid costly workplace disputes and penalties.
Meeting legal obligations
Running a business means your focus needs to be across multiple areas at the same time. This makes keeping up to date with constant employment legislation changes difficult at best. The employment relations landscape in Australia is always evolving. And with different states and territories having their own legislation that doesn’t always align with Federal legislation, the lines of HR obligations become blurred.
Getting the support of outsourced HR services like Peninsula and having access to a 24/7 HR advice line can help you get clarification from a team of employment relations specialists.
Award-winning technology
Outsourcing HR duties often involves having access to technology solutions. The right technology such as BrightHR Software can streamline your HR processes, improve data management, and enhance reporting capabilities. You can simply track performance clocking in and out times, manage leave, shifts and absenteeism.
BrightHR Software centralises your documentation securely in the cloud. This gives you an overview of your business operations from anywhere anytime.
The cost of outsourcing HR will depend on the size of your business and the number of employees. Peninsula can help your business with complex HR and employment relations challenges. We offer advice on wages and modern awards to help you avoid underpayment penalties, onboarding and documentation for new employees, and record keeping.
This article is for general information purposes only and does not constitute as business or legal advice and should not be relied upon as such. It does not take into consideration your specific business, industry or circumstances. You should seek legal or other professional advice regarding matters as they relate to you or your business. To the maximum extent permitted by law, Peninsula Group disclaim all liability for any errors or omissions contained in this information or any failure to update or correct this information. It is your responsibility to assess and verify the accuracy, completeness, and reliability of the information in this article.