Should You Outsource Your HR Department?

The decision to outsource your HR department is certainly not an easy one to make, but there are many advantages to letting a third party handle your human resources needs. Whether you’re a small business that can’t quite manage to fund an entire HR department on your own, or a larger business simply looking to reduce the cost of the necessity, there are some questions to ask yourself before you make the final decision to outsource. Here, you’ll find tips on making the decision and information on what you should consider beforehand.


Do You Need an HR Department?

The short answer here is yes; you’ll need an HR department in some form or another to handle payroll benefits, training, and more. The human resources division of your business is essentially your link to the employees, and things like direct deposit and payroll are certainly necessary to keep employees happy. You’ll want to have somewhere for your employees to go with concerns as well.

Many small businesses can’t quite afford the cost of an entire HR department. Not only are salaries for the personnel expensive, but you’ll need extra office space and accommodations for the department. Sometimes, it’s better to simply outsource in order to save time, money, and space. 

Is Your Training Program Outdated Or Causing Problems?

Having a great training program is not only essential for workplace safety and productivity, but well-trained employees are also much happier overall with their positions within the company. A well-trained employee better understands their role within your organization and is able to be left to perform their tasks without the need for constant supervision. A well-trained workforce also reduces risk, which businesses of any size can benefit from. You wouldn’t want someone to have a costly accident because they weren’t trained properly!

If you find that you don’t have the time or the resources to develop and implement a proper training program, outsourcing the task to a PEO service can help you save time while creating the best possible program for future employees. Remember that ongoing training is often necessary in an organization, and your PEO service will also handle future training needs so you can handle other things.

If you’re looking for a PEO service, visit Retire at 21 for a list of the best PEO companies for business with 20 or more employees.

Are You Having Trouble With Payroll?

Not only is messing up payroll a good way to lose your workforce, but it’s also a good way to land your business in hot water with the IRS or other government agencies. Payroll compliance should be a top priority for any business, and if you’re struggling, you need to fix the issue fast. No one wants to work for a company that can’t keep payroll on track, and you’ll certainly feel the heat if you fail to file your payroll taxes. 

A PEO service can take over payroll for your business and ensure that you’re not only paying on time but that your taxes and other compliance requirements are met. You’ll have peace of mind knowing that you won’t have to worry about filing, handling direct deposit or writing checks, or any other task that would otherwise impede you from focusing on growing your business. 

Can’t Offer Good Benefits?

Most small businesses simply don’t have access to the amazing benefits that larger corporations can offer their employees. The catch is that most potential candidates look for a good benefits package when they apply with a new business, and if you can’t offer those benefits, you might lose a great employee to the competition. Health coverage, retirement options, and more can help you bring the right people into your organization and help keep them loyal for years to come. 

Outsourcing your HR department to a PEO service will give you access to some of the great benefits that other companies have access to. Since PEO services serve hundreds if not thousands of companies at once, thus giving them access to better benefits than a standalone business would. Improve your benefits, payroll, and training all at once by outsourcing with a reputable PEO service. 


The onboarding process is crucial to ensuring your new employees feel welcomed and comfortable within your organization. A PEO service will handle your onboarding process as well as the training program, so new employees will be welcomed with care and trained with precision.

The Bottom Line 

The HR department handles many important tasks that a small business owner with no experience simply can’t afford to get bogged down with. If you find yourself wading through endless HR red tape and compliance problems, consider outsourcing with a PEO company to save yourself time, money, and stress. Not everyone is equipped to handle payroll or benefits, and that’s ok. There’s nothing wrong with admitting that you need help with certain tasks, and your employees will certainly be grateful to know their training, benefits, and payroll are handled by experts.

About Carson Derrow

My name is Carson Derrow I'm an entrepreneur, professional blogger, and marketer from Arkansas. I've been writing for startups and small businesses since 2012. I share the latest business news, tools, resources, and marketing tips to help startups and small businesses to grow their business.

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