If your business has more than a few employees, you may not be able to handle human resources on your own. Instead you might want to hire a full-time HR staff to tackle employee issues, such as payroll and benefits, or outsource the job to a payroll company.
Either approach has advantages. If you handle HR in-house, you have full control over the department and can fine-tune your processes and software to meet your employees’ needs. This choice may be the most economical if you have enough payroll work to justify a full-time internal team, since you only need to pay the labour cost of your HR staff. Outsourcing your payroll means paying labour costs plus the profit margin for whichever company you hire. When you keep your HR internal, you also make it easier for employees to ask questions or fill out forms.
Outsourcing has benefits, too. If your need for HR work is minimal, you can hire a payroll company for just a few hours a week instead of splurging for a full-time staff that may not have enough work to do. A payroll company also has access to the latest payroll and HR software. Finally, outsourcing HR lets you scale up your operations faster, since you don’t have to hire and train HR staff.
Outsourcing your payroll to a firm is a smart option, especially for a growing small business. Although this method can be costly, your access to greater flexibility and advanced training and software may be worth it.