Outsourcing certainfunctions frees up the internal HR team to be more strategic ratherthan tactical. (Image: Shutterstock)

In any part of an organization, getting caught in the weeds caninterfere with big picture thinking. That said, HR teams are hitespecially hard. Just handling tasks like payroll and taxes eats up a lot of time.

That’s why many businesses use outsourcing firms and software tohandle everything from payroll and resume screening to benefitsenrollment and compliance issues, says Barbara Mitchell, co-authorof “The Big Book of HR.”

Related: HR professionals face shifting priorities,challenges and opportunities

This hybrid model of outsourcing administrative tasks to allowmore time for building the business works well for many companies,says Sabrina Baker, founder of Acacia HR Solutions. The key togetting it right is knowing where outsourcing can add value withoutlosing the human touch.

Pros of HR outsourcing

Saves money. Small companies and start-upsusually can’t justify the expense of hiring a full-time HRemployee. Large companies also frequently rely on outsourcedexperts to bolster their staff. The biggest gains come fromoutsourcing somewhat repetitive tasks that require a lot of time,but don’t necessarily need a lot of training, guidance, orpersonalized knowledge. Good examples are large-volume recruiting,payroll, independent contractor compliance, and backgroundchecks.

Allows staff to be more strategic. Today, HRstaff play a role in recruiting, hiring, training, morale-building,policy-making, risk management, and more. That’s a lot for onedepartment, much less one person, to handle. Outsourcing some ofthese functions frees up the internal HR team to be more strategicrather than tactical, Mitchell says. “They can have more impact onthe business through succession management, coaching, andcounseling.”

Vertical expertise. Outsourcing can be a goodoption when you may not have the relevant expertise in-house. Jobslike legal compliance begin to get very complicated as a companygrows.

For example, at the 50-employee mark, regulations around theAffordable Care Act and the Family Medical Leave Act kick in.Smaller companies will likely have had someone running HR who isnot a healthcare and/or tax expert, because it’s not often you havethat talent in-house at that stage. This presents a legal risk tothe company and its employees. At this point, outsourcing this jobto an HR specialist who understands the legal vertical can behugely beneficial.

Cons of HR outsourcing

Reduced human touch. Some of the biggest, mostchallenging, and most emotional experiences in an office involveHR. HR works with employees and their families on very personalmatters like health, life insurance, and so on. Thus, the risk inexcessive outsourcing is the loss of connection between companymanagement and its employees. “It can feel a bit disconnected whensomeone handling HR or HR tasks is off-site and not part of theeveryday team,” Baker says. “Good outsourcers know how to overcomethat.”

Loss of in-house expertise. When companiesoutsource HR functions, they still need to keep a toe in the HRwaters. You should still name someone on staff as a point person tocheck on those outsourced tasks, otherwise you lose the risk ofyour company and HR team being on totally different pages. Plus, HRshould share the company’s culture, given their close work withemployees.

Less availability. There’s a good chance aresponse won’t be as quick from an external company as it would befrom an in-house HR person. Mitchell strongly recommends includinga performance clause in contracts for outsourced HR activities.“Contracts should be reviewed annually to see whether theoutsourcing is benefiting the organization and the employees, andif not, it shouldn’t be renewed,” she says.

James Mwaura is a marketing associate atSpoke, anAI platform providing HR support and answers to repetitiveemployee questions.

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• Is your HR department cutting corners?Probably.