How Outsourcing HR Can Boost Employee Development and Retention

Imagine a world in which your HR department isn't swamped with paperwork and instead has the time and resources to focus on your employees' well-being and development. It would be a great world, right? That is the power of outsourcing HR.

Many firms, particularly small and medium-sized ones, consider a specialized HR staff a luxury. There is nothing as wrong as this. 

You should note that disregarding HR functions can have significant effects, such as excessive staff turnover. And you don’t want this, do you?

To help you out, here's how outsourcing HR can help you build a more engaged and committed workforce:

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#1 You have time to build employee relationships

Employee relations are the foundation of a positive working environment. An outsourced HR partner can be an invaluable tool in effectively resolving conflicts, conducting performance reviews, and offering a confidential area for employees to express their issues. 

This allows your in-house staff or yourself to focus on developing great relationships with employees and cultivating a sense of community.

One company that has mastered this is AT&T.

Before the pandemic, AT&T's marketing and growth group had an in-office culture that was enjoyable, engaging, and focused on professional and personal development.

As more people started working at home, this was no longer possible. To continue with the community culture, they started a book club. The club gives employees the chance to think and learn together. 

The book club routine allows the employees to laugh together, talk candidly, and even demonstrate real vulnerabilities.

This not only helps the employees get to know each other better which is vital for one to feel as part of the community, but also helps them stay engaged with the company.

#2 You have access to streamlined processes

HR outsourcing companies use Recruit ATS and other forms of technology to ensure seamless and efficient HR operations. This results in fewer payroll errors, improved employee benefit administration, and many other perks. 

When these basic requirements are met, employees feel appreciated and are more likely to be satisfied and engaged at work.

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#3 You have more time for strategic initiatives

As you know, many HR functions are administrative, such as payroll processing and benefits administration. Outsourcing these allows your in-house HR team (or you, if you're a solopreneur) to focus on strategic initiatives that have a direct influence on employee engagement. 

One such initiative is developing a company ritual. Rituals give employees a sense of belonging and a connection to purpose, leading to improved performance. Udemy, an online learning platform, is home to one of the company rituals of all time: Drop Everything and Learn, or DEAL.  

Every month, on a Wednesday at 3:00 p.m., Udemy employees engage in DEAL, which allows everyone to drop whatever they're doing and attend an online class in any subject.

Employees attend classes in subjects that would help them improve in their day jobs, while others take professional development very personally. For example, employees take a turkey-making lesson at Thanksgiving because they will be hosting the event that year.

Giving employees opportunities for professional development keeps them engaged, which is vital because a 2016 Udemy study found that disengaged and bored employees are twice as likely to leave, which you don’t want. 

The same study found that 80% of employees believed learning new skills increases engagement.

#4 You have time to coach your employees

Coaching is a popular employee benefit with a demonstrated track record of success. However, until recently, coaching was primarily reserved for top executives and high-performing employees who were regarded as worthy of the organization's investment. 

Managers and HR leaders have been overburdened by the demand for employee coaching in recent years (particularly since the epidemic), mainly because they do not have the time to do it themselves.

By outsourcing human resource services, you can have the time to do it. If you don’t have the expertise, you can always hire a third party to help with the coaching. 

Coaching enables your employees to advance their personal and professional development to the next level. According to Deloitte, a coaching culture is the practice that's most highly correlated with business performance, employee engagement, and overall retention.

According to the company, high-impact leadership businesses spend 1.5-3 times more on management development than their peers.

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#5 You have an efficient onboarding process

Outsourced onboarding services provide a smooth transition for new employees, improving their experience and lowering early turnover. 

By delegating this crucial procedure to specialists, you can focus on creating a supportive work environment that promotes morale and long-term retention. 

New employees can establish a solid foundation in their new role, allowing them to feel cared for and have their questions answered without devoting time away from other employees. 

Many business owners usually wait for their new workers to settle into their new positions before offering professional development opportunities. 

Unfortunately, studies show that employees who learn from the start tend to have a significantly better overall experience with the firm.

Truckstop, a freight company, starts employees on their professional development journey by incorporating it into the onboarding process. On the first day of onboarding, new Truckstop employees discuss the company's vision and journey. 

The next day, newbies are given the entire day and the space and tools they need to discover themselves. 

The employees continue using the onboarding experience in their daily contact with management. The onboarding training helps the employees show up feeling like they are doing their best work because they are doing work that aligns with their talents and makes them feel like they matter.

LinkedIn, which offers one of the most consistent, integrated, and impactful professional development programs, allows employees to learn regularly. One "InDay" per month is designated for employees to concentrate on themselves, the company, and the world.

Each month has a theme, and employees are encouraged to engage in whatever works best for them, whether through the various scheduled activities or independently. 

Because LinkedIn InDay occurs every month, new hires can discover themselves alongside their colleagues as soon as they start. By doing this, LinkedIn essentially integrates development into onboarding, which is vital for employee engagement and retention. 

#6 You have access to expertise

HR standards and best practices change constantly. A smart HR outsourcing partner stays on top of these changes, assuring your company's compliance and reducing legal risks. 

You have access to a broader spectrum of skills than you couldn’t afford in-house, with professionals in recruitment, training, and employee relations.

As you can tell, this not only ensures that you have the best talent, but you also get to save a lot of money. 

For the best results with the HR partner you are looking to hire, ensure they have a proven record. You don’t want someone who is coming to learn on the job.

Parting shot

HR outsourcing has become popular for businesses aiming to optimize operations while increasing employee satisfaction and retention. According to a recent Deloitte report, 68% of firms outsource a portion of their human resource responsibilities. 

Research supports this trend, demonstrating that organizations that outsource HR functions have a 35% lower turnover rate than those that do it in-house. 

In addition to hiring a qualified HR professional firm, companies must prioritize open communication with their employees, provide opportunities for professional development, and cultivate a supportive work environment that benefits everyone.

Author Bio:

This article is written by a marketing team member at HR Cloud. HR Cloud is a leading provider of proven HR solutions, including recruiting, onboarding, employee communications & engagement, and rewards & recognition. Our user-friendly software increases employee productivity, delivers time and cost savings, and minimizes compliance risk.