Outsourcing HR in the UK

Considering outsourcing HR?

Outsourcing HR is the term for using an external HR Services provider to deliver some or all of your HR requirements.  Below we look at why & when you should consider outsourcing HR services, the pros and cons of outsourcing HR vs In-house HR as well as some different types of outsourced HR services.

You might consider human resources outsourcing if

• You don’t have any HR provision at all and you are spending too much of your own time dealing with HR issues, but you’re not sure if you have enough of a need to employ an in-house HR person.
• You don’t have any HR provision at all and don’t have the budget to employ someone permanently but recognise the need for a flexible HR provision.
• You have some internal HR admin provision but need additional support from someone with more experience or seniority.
• You have some internal HR provision but need additional HR support for specific projects – this could be for anything from administration to strategic support.

Pros and Cons of in-house HR

• Being in the business all the time, an In-house HR team should be fully versed in how you operate.

But they may be restricted by doing things the ‘company’ way rather than the best way, getting into a cycle of doing things how they have always done leaves little room for fresh perspective and new ideas, or they may be less able, or willing, to identify things that need improvement.

• They should be more familiar with all your employees and line managers, allowing them to tailor their approach accordingly, and more approachable if someone has a query or issue.

However, whilst being friendly with the team has many positives, it can make difficult conversations such as disciplinaries or redundancies much harder, and employees may feel reluctant to deal with someone who might not seem neutral to them.

• You may have someone that can manage some HR tasks in addition to other duties, meaning you don’t have to pay someone solely for HR.

But unless someone is focussed solely on HR, it may be difficult for them to keep up with best practice and legislative changes. HR Consultants will be appropriately experienced and qualified, and fully immersed in it allowing them to stay up to speed more easily.

Pros and Cons of outsourced HR in the UK

• Choose the right HR consultancy and, as well as their professional qualifications, you can benefit from their years of experience. When dealing with people, situations are rarely clear cut, so having a breadth of real world experience to draw on can be very helpful.

But you have to select who you work with carefully. Getting pragmatic, risk assessed advice from a senior consultant with 20+ years’ experience and CIPD level 7 is very different to getting advice from someone who is newly qualified and has little working knowledge.

• Human resources outsourcing means you don’t have to commit to employing someone and all the additional responsibilities and overheads that comes with an appointment.  If you choose a Pay As You Go service but find you no longer need as much support, you don’t need to worry about changing terms or making people redundant.  Likewise if you need extra help for a short period, that’s easily arranged.

But services for outsourcing HR vary so make sure you choose a service that meets your needs.  Check your outsourcing contracts before you sign and keep on top of renewal dates to avoid being tied into long term contracts you don’t need.

• Outsourcing HR can be more cost-effective. Find a service that matches your requirements, and you’ll only pay for the help you need.    Even if you commit to a retained service, monthly payments will likely be less than the costs of an employee.  With an employee you’ll have to pay not just their salary but also items such as their NI and Pension contributions, training, equipment and employee benefits.

But an HR consultant is not your employee, so you won’t have the same authority or control over their work – although naturally it’s in their best interest to do their best, if they want to continue working with you!

Types of UK Outsourcing HR and Employment Law Providers

Choosing whether or not to outsource will also depend on the type of support and advice you need.  We’ve explored here the pros and cons of outsourcing to an HR Consultancy, although many of the points will apply to other types of provider too.

HR consultants/ HR Consultancy:

HR Consultants can provide a range of HR support services from day-to-day HR administration to bigger strategic HR projects.  They will provide support with people management challenges such as disciplinaries and grievances, as well as a proactive approach to issues such as employee wellbeing, team engagement and learning & development.

HR Consultants may offer various service packages dependant on your needs including retained HR services packages and Pay As You Go services.  Some HR Consultancies, like Pure Human Resources, have the necessary experience and qualifications to support with employment law issues.

Look for an HR Consultant with plenty of pragmatic ‘real life’ experience as well as relevant professional qualifications.

Employment solicitors:

Depending on the nature of your issue, it may be necessary to involve an employment solicitor.  Employment solicitors will have legal qualifications,  be able to provide legal advice in relation to employment law and be experienced in dealing with other lawyers.  You may choose to engage an employment solicitor to represent you at an Employment Tribunal or to advise on complex contractual matters, but experienced HR professionals such as Pure Human Resources also have Employment Law qualifications and can advise on the majority of day-to-day legislative matters relating to employment and as such may be able to provide you with most of the support you are likely to need.

Employment lawyers do tend to be more costly than HR Consultancy services so it’s worth making sure you choose the right service for the level of support you need.

Employment Lawyer and HR Consultancy services can complement each other, with one providing technical legal advice and the other helping you to translate that into the actions you take with your employees.

Recruitment Specialists:

Many businesses choose to outsource their recruitment to benefit from the expertise of a specialist and to save time.  Recruitment agencies are one option, but some HR consultancies also offer fixed fee recruitment services, acting as your in-house recruitment team, which can be very cost effective.

Pure Human Resources are an experienced HR consultancy who provide outsourced HR support and services for businesses.  We offer both pay as you go HR and retained HR service packages, as well as support for larger scale or one-off HR projects.  We also offer a Fixed Fee Recruitment package.  If you are considering outsourcing your HR needs, contact us for a no obligation chat and a free audit of your current provision, to see whether we are the right choice for you.