When you run a business, one of the things you need to do is keep your costs as low as possible. After all; the primary aim is to make as much profit as possible! The sad truth for some enterprises is they tend to waste money unnecessarily. As odd as it might sound, having an in-house HR department can now be considered one such unnecessary business expense.
The traditional role of the Human Resources department has changed in recent years. There’s no denying that the evolution of technology has influenced what HR teams do these days. If your business has an HR department, should you disband it? Well, if you’re looking at ways to optimise efficiency in your business, the answer will probably be yes. Here’s why:
Outsourcing is king
You might not know it, but a lot of functions that you carry out in your business can get outsourced nowadays. One such example is the roles that HR officers provide to an organisation.
Part of you might be thinking that you need your HR department to handle payments to your employees and organise tax payments on their behalf. But, if you take a look at this payroll company website, for instance, you can have a third party do that for you. And what about recruitment, I hear you ask? Well, most recruitment agencies can offer a full screening and interview service.
So, where does that leave your existing HR department? Well, if you outsource just those two functions alone, there isn’t much else for them to do!
We all know how expensive it is to hire an employee, even if they were minimum wage workers. Another issue more companies are finding with their HR teams is their increasing costs. Examples of those expenses often include:
- Compliance; and
The harsh reality of in-house Human Resource departments is they contribute little to a company’s bottom line. They don’t sell any products or services, nor do they provide other support services to a business.
Lack of flexibility
While HR teams can be credited with putting certain systems in place for companies, they can also be inflexible to the needs of employees. One of the biggest headaches of HR departments to business leaders is their lack of flexibility.
Some of the things bosses cite as HR complaints include mandatory training for employees, even if it offers little value to their actual day-to-day work. There is also a lot of “red tape” to deal with, such as stacks of paperwork that need to get filled in, reviewed, and approved.
Many of a firm’s processes can get speeded up by just cutting out the middleman – in this case, the HR department.
There was once a time where a Human Resources department was an essential function of any business, regardless of its size. Today, the increasing number of HR outsourcing services means it makes little financial sense to keep those functions in-house. In summary: the death knell is well and truly sounding for the traditional HR department.