As a small business, is it worth outsourcing my HR to a freelancer?

If you’re a small to medium business (SME), it’s very possible you DON’T need a HR department, or even a HR person on your payroll.

Instead, you could outsource some or all of your HR tasks to a freelancer. In other words, an independent, self-employed contractor. Or, a HR agency.

According to the CIPD, outsourcing HR is something that SMEs tend to do more than larger firms. The CIPD also claim that the most common services freelance HR professionals offer, are: coaching and development, and giving complex advice.

As an independent, virtual HR director myself, you may accuse me of being biased! 😜 But, there are real commercial benefits to be had from keeping HR off the payroll. Read on to find out what they are👇

OUTSOURCING YOUR HR SAVES YOU MONEY 💷

While hourly rates for self-employed contractors might be higher than what you pay your employees, hiring a HR freelancer will save you heaps of money in the long-run.

Think about it 🤔

🙅No salary or bonus

🙅No equipment

🙅No holiday pay

🙅No sick pay

🙅No training fees

🙅No company cars

🙅No pension

If you’d like to delve a little deeper into the differences between an employee and a self-employed contractor, check out a previous blog I’ve written. It’s called: WHAT ARE THE PROS AND CONS OF HIRING AN EMPLOYEE VS. A CONTRACTOR?

OUTSOURCING YOUR HR GIVES YOU TOP-NOTCH EXPERIENCE AND EXPERTISE 👌

Many freelance HR professionals have endured years in the corporate boot camp!

But, don’t knock it! This will have provided tons of invaluable training ­– allowing them to take all the positives of corporate life with them, while ditching the drawbacks!

In a corporate environment, they will have been able to hone their talents in a highly-professional environment, for a company that’s probably invested thousands of pounds training them and developing their skills.

On top of that, as a self-employed contractor, they’ll have learnt what it’s like to run a small business and widen their HR experience across different sectors – perhaps specialising in specific areas.

This is super-rich experience and expertise that they can bring to your business.

OUTSOURCING YOUR HR DELIVERS QUICKER RESULTS

As business owners themselves, freelance HR professionals know that time is money. No languishing on corporate time, clock watching and waiting for the day to end. They’re usually juggling a few clients at a time and aiming to be as efficient as they can be!

They’re used to getting stuck in and acquainted with your business at pace.

They’re self-starters, comfortable in new environments, and driven by getting you results, and quickly.

No inductions needed. They can hit the ground running from the get-go! 🏃

OUTSOURCING YOUR HR GIVES YOU QUALITY

Unlike a HR manager who’s on your payroll, knowing that they’ll get paid each month no matter what – a freelancer worth their salt will want to dazzle you with their work every time 🌟

They’ll strive to deliver you top-notch quality because they want you to pay for their services. And what’s more, they want you to come back and ask for more. Simples!

OUTSOURCING YOUR HR GIVES YOU THE FREEDOM TO CUT YOUR LOSSES

Hiring a self-employed contractor is always the LEAST risky option for any SME. This is because their employment status means they have fewer rights.

They provide a service to you, and once they’ve fulfilled their service, you can let them go (if that’s what you want). Or, if they’ve not met your requirements, or they aren’t the right ‘fit’ – you’re not tied to them forever.

On the other hand, if you hire a HR manager and then want to get rid of them, it’s super-hard to do. And what’s worse, you could end up in an employment tribunal for wrongful dismissal and being sued for thousands of pounds 😱

OUTSOURCING YOUR HR GIVES YOU 100% FLEXIBILITY 💪

There are times when you might need a HR pro. For example, when an employee has raised a grievance, or when you’re making people redundant. Or even when you need some leadership coaching.

But, there are other times when you might struggle to find something for your HR manager to do.

Outsourcing your HR means you get what you want, when you want it. And what’s more, a freelance HR consultant is able to work with whoever you need them to. Not just everyone on your payroll.

OUTSOURCING YOUR HR GIVES YOU A DIFFERENT PERSPECTIVE 👀

Some small business owners worry that bringing in an outsider means they won’t know your business like an employee would.

But believe me, that could be a MAHOOOSIVE advantage when it comes to people problems.

Being able to look at the way you run your business through a different lens is invaluable.

OUTSOURCING YOUR HR GIVES YOU ACCESS TO A WIDER NETWORK 🤝

Freelance HR professionals are massively well-connected. They have to be, that’s how they get their work.

This can really benefit your business. For example, you might be working with a freelance HR consultant who’s helping you to re-structure your business. But, you now want advice on pensions – which isn’t their area of expertise.

In my experience, that HR person will be able to recommend somebody who can help. And quality is always assured because they won’t want to tarnish their own reputation.

PROTECT YOUR RELATIONSHIP 🔐

Some small business owners fret about using an outsider to handle delicate people matters. That’s why I would encourage you to use a CONTRACT FOR SERVICES TEMPLATE.

This gets everything about your service agreement in writing, without you losing the flexibility that working with freelancers gives you.

TO SUM THINGS UP THEN

🏢According to the CIPD, SMEs tend to outsource their HR tasks more than larger firms do

👌As a virtual HR director myself, I know first-hand why this makes sense to do so

💷First up, it’s WAAAY more cost effective and you get a shed load of experience and expertise for your money

⏱As entrepreneurs themselves, freelance HR professionals will hit the ground running for you, because they know time is money

🌟And, because they want to be paid, they’ll strive for perfection on your behalf

🙅Self-employed contractors have fewer rights so you’re never tied to them

📅This flexibility is really attractive. You can bring them in as and when you need them

👀Don’t worry that an outsider won’t know your business like an employee might. When it comes to people problems, this is a HUGE advantage

🗣And if they can’t help you with a specific HR issue, they always know somebody who can

📑But, just because it’s a more flexible arrangement, it’s still worth protecting your business with a Contract for Services Template that I’m very happy to provide you with!

 

Mandy Hamerla

Virtual HR Director & Leadership Mentor. I create game-changing HR & Hiring Strategies for ambitious small businesses in the UK and support you to lead your team with confidence. Check out my shop to download HR Templates & Contracts designed to make life easier.

www.modernhr.co.uk