When you hear about the concept of “outsourcing” any kind of business service to a third party, you might naturally be concerned about rising costs. But there are actually several examples of outsourcing that will help lower your business costs, and a great example in many cases is outsourcing human resource (HR) services.

At WTA Inc., we’re proud to serve as a top PEO for businesses around Salt Lake City, from outsourced payroll services to recruitment, hiring, tax administration, benefits and more. We proudly help businesses manage every element of the HR, helping them save costs and be more efficient in the process. Here are some reasons why in-house HR costs can sometimes add up quickly, plus how HR outsourcing benefits and how companies like ours can bundle all these needs into a single, cost-effective solution that benefits you in multiple ways.

Breaking Down In-House HR Costs

Here are some basics on in-house HR costs, and how they can quickly grow and sneak up on you:

Salary: For starters, HR professionals don’t come cheap. According to a recent survey, the average salary for an HR manager is just over $95,000 per year in the United States. And that’s not including any additional benefits or bonuses they may receive.
Administrative Expenses: On top of salaries, there are also administrative expenses to consider such as office space, equipment, and supplies. These costs can add up quickly, especially if you have a larger HR team.
Training and Development: As with any department within a company, training and development are essential for HR professionals to keep up-to-date on best practices and industry changes. This can add significant costs to your budget.
Compliance Costs: With ever-changing laws and regulations, it’s crucial for HR to stay compliant in their practices. This may require hiring legal counsel or investing in software to ensure compliance, both of which can be costly.
Employee Benefits: HR is responsible for managing employee benefits such as health insurance, retirement plans, and other perks. These costs can also add up quickly and need to be factored into the overall budget.
Technology Expenses: In today’s digital age, HR departments often rely on technology to streamline processes and enhance efficiency. However, technology comes with a cost and needs to be included in the budget.

HR Outsourcing Benefits

On the flip side, outsourced HR agencies like PEOs are able to bundle their services and offer cost-effective solutions for HR needs. By outsourcing certain tasks such as payroll, benefits administration, and employee relations, companies can save on the expenses associated with hiring a full-time HR staff.

Moreover, by leveraging the expertise of an outsourced agency, companies can ensure compliance with constantly changing labor laws and regulations without incurring additional costs. This is especially beneficial for small businesses or startups that may not have the resources to hire a dedicated HR team. Outsourcing allows them to access professional HR services at a fraction of the cost.

How Outsourced HR Creates Long-Term Savings

Let’s get a bit more specific – here are some direct ways outsourcing HR services can help create long-term savings:

Risk mitigation: Labor laws and regulations are constantly changing, making it difficult for businesses to keep up and ensure compliance. By outsourcing HR services, companies can rely on professionals who are well-versed in these laws and can help mitigate any potential risks or costly mistakes.
Cost-effective solutions: As mentioned earlier, outsourcing HR allows businesses to access professional services at a fraction of the cost. This means they can save money by not having to hire full-time employees or invest in expensive HR software or training programs.
Legal coverage: HR professionals are trained to handle sensitive employee information and maintain confidentiality. By outsourcing these services, businesses can protect themselves from any legal issues that may arise due to mishandling of employee data.
Flexibility and scalability: As businesses grow, their HR needs also evolve. By outsourcing HR services, companies can easily scale up or down depending on their needs without the hassle of hiring or laying off employees. This allows for greater flexibility in managing operations and resources.
Employee retention benefits: HR outsourcing allows businesses to focus on their core operations and strategies, which can lead to increased employee satisfaction and retention. Employees can feel more supported and valued when they have a dedicated HR team handling their needs.

Why Outsourcing is Ideal for SMBs and Startups

Outsourcing HR services is especially beneficial for small and medium-sized businesses (SMBs) and startups. These types of companies often have limited resources and may not have the ability to hire a full HR team. Here are some reasons why outsourcing is ideal for SMBs and startups:

Cost-effective: As mentioned earlier, outsourcing HR services can be more cost-effective than hiring a full-time HR team. This is especially important for SMBs and startups with limited budgets.
Experts in the field: When you outsource your HR services, you are working with professionals who have expertise and experience in the field. They are up-to-date on industry best practices and can provide valuable insights and advice.
Time-saving: For smaller businesses, HR tasks can be time-consuming and take away from other important aspects of running the business. By outsourcing these tasks, you can free up time to focus on growing your business.
Customizable services: Outsourcing HR allows businesses to choose the specific services they need, rather than having to hire a full-time HR team that may not be necessary for their current needs.

At WTA Inc., we’re here to offer top PEO services that allow you to outsource all your HR needs – saving both time and money in the process. Contact us today to learn more about our services for SLC businesses!