When should an Outsourcing HR company add L&D to its portfolio?

When should an Outsourcing HR Company add L&D to its portfolio? 

Every Small business needs to keep on top of its legal duties and overstretched owners have come to rely upon Outsourced HR partners to carry the heavy load of keeping them legal and compliant.

A small business is like any other business, from a microbusiness to a fast-growing corporation, they all need to take care of HR. That involves recruitment and retention, onboarding, performance evaluation, sickness, holidays and of course employee grievances.

That’s the compliance role of HR Outsourcing. Functional, legal and statutory requirements being covered is a purely operational function. But as companies grow or want to develop, rather than building a back-office they instead upgrade the HR Outsourced partner, from a compliance role to one of a strategic advisor. For Outsourced HR companies growing their offering to match their customers’ needs is paramount to retaining and to developing their own value offerings.

Companies with fewer than 50 people rarely have an in-house full-time HR function, but they have needs that stretch beyond HR compliance. In dealing with people HR companies are involved with people development, a role beyond compliance but one where they are ideally placed to solve for SME businesses.

Developing people is a real value-added service, from skills development to improving productivity, from retention to personal growth. Helping people throughout their role is a simple extension to the HR function. Good HR does not stop at compliance but extends to all people related functions and that certainly includes Learning & Development.

The challenge for Outsourced HR companies is that they traditionally have few skills in Learning & Development, but in today’s world that is no longer a prerequisite to providing a L&D service. Outsourced HR companies can now provide a modern L&D function through an online learning platform, such as IMPROVE.

IMPROVE is an online Learning Management System (LMS) which manages employees learning. It also allows the HR partner to set and monitor learning by employees, not just in one company but in as many SME companies as the Outsourced HR company wishes to manage.

Companies have another option which is bringing in their HR in-house with their own HR manager. But with an average national HR manager salary at £43,000, it’s a major cost to bring this in-house. This compares with a typical fee for a SME of between £1,200-£3,600 per year for fully outsourced HR management, including health and safety, payroll, etc. it’s a big shift in costs. So Outsourcing HR is nearly always a more cost-effective option than having a full-time salaried employee.

For Outsourcing HR partners being able to extend their offering to a full-service outsourcing partner is not only the natural way to add value, it also secures your existing customer contracts. Growing your Outsourced consultancy with successful customers by adding in services, such as Learning & Development using IMPROVE with its LMS provides an HR consultancy with the ability to extend and grow without the cost of people or development of new skills in L&D.

Being able to add additional on-site hours, enhancing their offering with high-growth clients is a positive way to back success, growing the consultancy business. Growing businesses need more front-line staff, more support and advice, enabling the Outsourced HR partner to provide more value from operational through to strategic board level support.

Full service Outsourced HR partners ensures that your business grows your most successful customers, delivering reduced costs to your customers increasing efficiency through multiple services and reduces risk to you and the customer’s business.