In-House or Outsourced HR….What is the best option for my company?

HR Outsource or In-house HR

When considering HR solutions, the biggest thoughts are on company size and the budget you have for HR. HR outsourcing is a great option for small and medium-sized companies that might not have the ability to support a full-time human resources role. Outsourcing allows companies to save money as you are not paying payroll and employment taxes you would by having an internal HR employee.

With outsourcing you have professionals that access advanced HRIS technology, offer benefits admin, ensure compliance, complete compensation reviews, help with hiring and terminations (to name a very few roles).

Outsourcing HR gives you access to trained, certified HR professionals that work with various clients and industries so they are up to date on all employment laws, a

• Training staff
• Payroll administration
• Recruiting
• Benefits administration
• Performance Management
• Risk Management and Safety
• Employment and Labor Law Compliance

On the other hand, having an internal HR employee allows you to have more control over their time and their work since they are an employee. However, you will need ensure they know all the laws and compliance changes and some tasks might beyond their abilities (skill set).

As your company grows your HR responsibilities also grow it is best to be prepared so you are in compliance the whole time. Having HR on hand for consultation before making any big decisions could save you a ton in wrong moves.

How do you hire an HR Consulting Firm or Consultant?

According to SHRM (Society for HR Management) outsourcing some or all HR tasks can have advantages including compliance, better focus on company strategy, and access to tools you might not know exist (HRIS, payroll systems, performance management).

Referrals are always great help in finding a consultant. If there is no referral peer reviews and active LinkedIn and social media could be a good help to see if that person or company is the right match for your company’s needs. Google and Yelp reviews could help in your search too.

Steps to finding your consultant or HR firm:
• Be realistic with your budget
• Meet with the consultant
• Ask for case studies or info on similar industry and sized companies they have worked with
• Be transparent in known needs
• Be open to having an audit…it’s a scary vulnerable word, but sometimes the issues are not right on the surface and addressing those deficiencies could lead to better outcomes. The consultant wants to be a partner and help you focus on your business so it is important for them to gather as much info as possible
• Ask for costs and fees and a plan for the first month, 2nd month and so on

Sometimes there is a lot of work upfront, but once compliance and systems are implemented you can become a well working compliant organization with a consultant to call as things come up and to work on more things as you grow.

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On September 30, 2023, California enacted Senate Bill 553 (Cortese), introducing new mandates under California Labor Code section 6401.9, effective July 1, 2024. This legislation

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