Outsource HR or recruit? That is the question, and will a recession influence the answer?
This week I spoke with two company owners, each employing the same number of people (about 150) and in a similar industry. One is adamant that she needs an in-house HRBP (and so we’re now recruiting a suitable candidate for her), the other wants to outsource HR. Which one is right?
Fortunately myHRdept can do both, with a 20 year pedigree in HR outsourcing and a track record of recruiting HR roles for clients, but it did set me to thinking about the arguments in favour of both.
Recession will tip balance in favour of outsourcing HR
As the UK and the rest of the world heads into recession I suspect the balance will tip to outsourcing. Recessionary HR agendas tend to focus on cost saving – redundancies, restructures pay freezes & the inevitable cuts to support functions, of which HR is one. Intelligent organisations with sufficient cash will plan for an emergence from recession, upskilling workforces during a recessionary lull. Those without the cash will aggressively cut costs, and people, to survive, but they’ll be off the pace when recovery begins – the classic boom/bust cycle.
Red-hot HR market, but are HR job losses looming?
At the moment the HR market is red-hot, and HR candidates are enjoying inflated salary conditions with, typically, 5 or 6 would-be employers chasing each available candidate. The ‘Great Resignation’ is already predicted to end in the ‘Great Regret’ and some HR candidates on the market today, many of whom won’t remember previous recessionary impact on HR, will find themselves in a vulnerable position – being in a ‘non-core’ function without the necessary service for protection or compensation when their employers pare back their non-core operations under recessionary pressure.
Back to today – outsource HR, or in-house HR?
Returning to the present, is it better for larger SMEs to outsource or have in-house HR in an organisation with 150 people? For smaller SMEs I would always suggest considering outsourcing HR – an HR outsourcing organisation like myHRdept possesses a far wider range of HR experience than any one individual can bring, and whilst a smaller SME may need all of these functions some of the time, they won’t need any of these functions all of the time.
To some extent the same argument applies for our larger SMEs. Outsourcing to a quality HR provider enables access to HR administration, employment law specialists, case managers, L&D professionals and experienced HR Directors – again far more experience than a stand-alone HRBP will bring. However, a capable in-house person will be able to spend more time supporting and coaching managers and driving people-projects than an outsourcer, and so will be the right choice for many larger SMEs.
As ever then, the decision to outsource HR or appoint an in-house HR person is agenda-driven, and that has to be the start point. By defining, carefully, what the organisation wants of HR, we will be able to answer the question, which in some cases will be outsourcing HR, in some cases in-sourcing it, and, in many cases, a combination of the two – a capable in-house person with the right skills set for the organisation’s needs supported by an outsourced HR team.
HR support from myHRdept
Whether you’re looking to outsource your HR, or need to appoint an in-house HR person, myHRdept can help. We’ve been outsourcing HR for 20 years, and have a long track record in recruiting HR roles too. In the recent past we have recruited HR Directors & CPOs, HRBPS, HR Advisors, L&D Managers and Officers and HR administrators.