Should a Company Outsource Human Resources or Have an In House HR Department?

Many businesses rely on HR (Human Resource) agencies to help them to manage the day to day operations of their employees - and within modern business structures, there are two main ways to do this. The first is by dedicating a department within an organisation to cater to the needs and responsibilities of Human Resources and the second is by outsourcing these requirements to an external team of experts such as an HR agency or an expert recruitment company.

Both have their own set of advantages and disadvantages, and to better understand what these are we will be further evaluating the details associated with both types of solution.

Should a Company Outsource Human Resources or Have an In House HR Department?

Generally speaking, an internal HR department will often be able to address matters in much the same way as an external one – but the main benefit is that the latter type can be cheaper to hire and can be taken on as and when they are required. When relying on an external team, the ability to call them in to undertake particular tasks can be beneficial – especially the types of tasks that require substantial attention.

Some of the most common tasks include the need to hire and fire employees; an activity that can often have severe repercussions for a business if not practiced correctly. If a member of staff is made redundant, or if they are dismissed for any reason, then the company will need to ensure that all legal documentation and reasoning is properly prepared, so as to avoid the risk of being sued.

An internal company can still help with the above, but where an external company can be hired and then relieved of their duty; one that is a part of the dedicated department will need to receive a sustainable income and this can be quite costly for new businesses. In order to comply with all legislation a company will need to utilise an HR agency, or at least a specialist, and many business owners (particularly new ones) find that the best way to keep their costs as low as possible is by hiring specialists on an if and when basis.

So, which method can be more beneficial?

When attempting to maintain the day to day operations of a company, as well as its internal functionality and performance, it can be suitable to hire an external HR agency, or make use of an internal one instead. For quick matters, especially those that relate to immediate concerns (the need to hire and fire or any other urgent requirements), it can be much more cost effective to hire an agency as and when they are needed.