Why a co-sourced people function is essential for growing businesses
When faced with the day to day pressures of running a successful, growing business you face brand new challenges everyday. As the business grows, the demands of running the day to day begin to outweigh the core product or service and it’s often difficult to know how to prioritise the day to day tasks. HR is often the last strategic consideration, but in reality, getting an HR strategy right is critical to sustainable growth.
The traditional view of HR is outdated, but a lot of business owners and stakeholders still don’t understand the positive impact on the bottom line HR can have when delivered correctly.
You might have already been dabbling in recruitment, pulling together some basic policies and muddling through on-boarding and basic compliance. But you’ll probably have found it’s more complicated, time consuming and frustrating to deal with than you first anticipated. A business is only as successful as the people within it, so getting people right is critical to success.
With technology and AI affecting every aspect of an organisation, it’s no different in the HR space. There are thousands of HR technology products on the market, knowing what’s best and where to invest is another area your co-sourcing partner will advise on.
So what does co-sourced HR look like?
Co-sourcing your HR function means bringing expert support into your business, to partner with you flexibly to deliver strategic and tactical support.
Co-sourcing provides you with up to date expertise, but on your terms. You save time, maintain overall control, unlike traditional outsourcing. For argument’s sake, if you were to co-source your end to end HR function, you’d have the option to select support in the following areas, depending on your organisation’s priorities;
Strategic HR representation at board level
Compliance - basic employment contracts, templates, employee handbook and support from an HR advisor
HR technology - your co-source provider will enable you to use technology they’ve already invested in, or advise you on technology that’s right for the stage of your business
Recruitment - advertise, source, interview and onboard the right employees
Employee payroll and benefits
Employee engagement - audits, surveys and action plans
Employee training
Legal advice and support
Employment tribunal representation
The potential cost to a business of getting it wrong
Arguably getting people right is even more important to a small, growth business than it is to a larger organisation. According to CareerBuilder, the cost of a poor hire can be anything between £10,000 and £30,000. That’s no joke for a small business.
Small businesses that have significant growth targets can’t afford to make too many errors with people at the early stages. Poor hires can impact on staff morale, especially in a small tight knit team that works closely together. Bad hires often struggle with teamwork, which in a small group is highly detrimental to productivity. At this growth stage of a business hiring, developing or engaging the wrong people can be catastrophic for growth targets.
The other risk is managing what happens if things go wrong. Without the right tribunal advice and robust legal positioning, the cost of mismanagement of an HR complication can mean the end for a small business.
For the vast majority of businesses, people are their most significant financial and time investment. They’re also the linch pin for success, so recruiting the right people, keeping them engaged, and continuously developing them is essential, particularly for businesses with stretching growth targets. Some of the most significant challenges small businesses face when it comes to people is for this reason.
Engaging with an expert co-sourcing partner is a great way to guard against the HR risks faced by growing organisations with limited experience in this area.
If you think you might need some expert People advice, get in contact with one of Fact3’s experts here.