When to Hire or Outsource HR

January 17, 2019 Written by Oralie Chapman

Small business owners and CEOs of startups are known for wearing many hats – sometimes more than one person can reasonably handle. In some cases, one or two employees are given with many roles; your front desk person might also be handling the bookkeeping, for example. When a business is small – 50 employees or less - owners are more tempted to handle HR tasks such as hiring, payroll and benefits plans without hiring an HR manager or outsourcing their HR needs. The question is at what point does this slapdash approach start to hurt the business and when is it time to hire or outsource HR?

When companies tend to hire or outsource HR


Regulatory compliance with labor laws becomes a factor as companies grow beyond 50 employees so it is much more common to see companies with 50-100 and 101-150 employees with set HR practices and strategies handled by an HR manager or PEO. A study of 350 small business shared in an article published by the Society for Human Resource Management (SHRM) found that companies with 100 plus employees are twice as likely to seek HR expertise as companies with less than 100 employees.


When it’s time to hire an HR manager or outsource HR


Early stages of the business


In the early stages of a business there is a need for HR expertise because companies cannot grow or succeed without hiring great employees and creating HR practices and strategies. More than ever before, it is important to create an employer brand and recruiting strategy so you can interest the best talent. An HR expert will help build a positive company culture and employer brand that can be used to attract the right applicants and retain employees over the long-term.


You have 50 or more employees


The reality is that the more employees a company has, the more HR work there is. When the business grows beyond 50 employees there will be more employee relations issues to manage, more paperwork, and more benefits plan choices to manage. As the company grows, employees hired for other roles will not have the time to cover HR tasks “as-assigned” like they did in the beginning and the company will be in danger of stagnating if the owner is taking time away from the business strategy to handle HR work. If you are finding that HR tasks are taking time away from growing your business or preventing employees from getting their primary jobs done then it’s time to hire HR help.


You’re actively hiring to fill the needs of your growing business


As a company grows it becomes even more important to find the right talent to make the business thrive. This means coming up with an effective hiring strategy, creating and sharing job posts, sorting applications, handling interviews, making hiring decisions, presenting a competitive offer and onboarding. An HR expert will handle these tasks for the business which means attracting and hiring the right employees and setting them up for success. High turnover costs businesses a lot of money; hiring the right employees and treating them well saves money and helps the business in the long run.


The value of HR


HR experts indirectly help businesses grow because they hire the right new employees and free up the business owner and other employees to focus on other important responsibilities. HR plays an important role in employee retention as they handle interpersonal issues between co-workers, manage promotions and choose benefits packages. They also protect the business by ensuring compliance with employment laws.


Partnering with Makai HR


No time for human resources tasks? That’s okay; we’ve got you covered through HR outsourcing! When you partner with Makai HR you can get on with the business you are trying to grow while we take care of your employee needs from payroll to taxes, health insurance/benefits and worker’s compensation. You also gain peace of mind that you are in compliance with all of Hawaii’s employer laws (if you’ve ever looked you know that the list is very long). When choosing a PEO to partner with, there are many things to consider including cost, services and technology solutions.


With the cost of doing business in Hawaii at record highs, we know how important it is to keep labor costs in line with revenue. Our plans are priced competitively and include value-added services like time-in/time-out systems. Our three tiers of PEO service plans are tailored to the size of your business and specific needs. We offer a 100% paperless solution which means that your employees can manage their needs through a computer, tablet or phone. We can truly improve your employees work benefits while freeing you up to run your business.


What are you waiting for? Companies who partner with a PEO benefit from 7-9% faster growth, 10-14% lower employee turnover; and they are 50% less likely to go out of business. Contact us today to get started!