Outsourcing time-intensive human resources functions can relieve some of the burden on your HR team, providing them with greater flexibility to engage employees, build culture, and add value to the organization.

But outsourced HR services aren’t only a way to save time. They can also generate considerable cost savings for your business. Indeed, rather than thinking about outsourced HR as an expense, it may make more sense to think of it as an investment.

Consider just a few of the ways in which outsourcing HR can generate cost savings for your business.

Saving Money on Payroll

One of the most common examples of cost-saving HR outsourcing is the use of specialized payroll processors. Outsourcing your payroll can help you avoid errors like employee misclassification. Such errors are fairly common and easy to make, and can generate significant financial penalties for your company. By outsourcing to a specialist, you can steer clear of these errors and comparable payroll-related pitfalls.

Reducing Employee Turnover

Another way in which outsourcing your HR services can help you save money? Reduction of employee turnover.

Consider that, while there are many reasons for employees to leave a company, many of the most common reasons pertain to HR functions. For instance, employees may become dissatisfied with a poorly designed benefits package, with a perceived lack of managerial support, or with a general lack of appreciation for their role within the company.

By outsourcing key HR services, you can both ensure a smarter benefits package and create more opportunities for your in-house HR team to engage the employee base, or to intentionally foster positive company cultures.

And when you reduce employee turnover, you also reduce the expenses that come with new employee salaries, onboarding, and disruptions to your production schedule.

Improving Employee Engagement

The flipside to this is that partnering with an HR company like FullHR can help improve employee engagement. Simply put, your employees will be more invested in the company if they feel like they are well-supported via generous benefits packages. And, by outsourcing administrative tasks, you can free your current HR team to devote more one-on-one attention to employees who need it.

Statistics show that employee engagement is directly linked to productivity, creativity, and profitability. Thus, by ensuring a more engaged workforce, you can also have a sizable impact on the bottom line.

Other Ways to Save with Outsourced HR Solutions

These are just a few examples of how outsourcing HR functions can lead to cost savings. Take note of a recent report from the National Association of Professional Employer Organizations (NAPEO), which finds that the annual ROI of partnering with a PEO can include:

• Savings of up to 37 percent from health benefits.
• Average savings of 5 percent from other external HR expenditures
• Average savings of 4 percent for worker’s comp costs

If you’re ready to learn more about the practical and financial advantages of outsourced HR services, we’d love to tell you more about FullHR’s integrative solutions. Reach out whenever you’re ready to chat.