hr outsourcing myths

Common HR Outsourcing Myths Debunked

By Sidney Abrams
In July 25, 2017

According to our 2017 Nonprofit Employment practices survey, half of nonprofit organizations expect to create new positions this year. However, despite this expected growth, less than 1% of nonprofit funding goes toward supporting talent. This is a problem. Could outsourcing your human resources function to an expert firm be part of the solution? Could doing so help you give talent the focus and strategic support it deserves? Let’s take a deeper look.

What is outsourced HR?

When an organization outsources its human resources function, the organization engages an external partner to manage everything that would typically be handled by an in-house HR staff, from talent acquisition to onboarding and orientation, employee relations, learning and development, compliance, benefits and compensation and even conflict resolution. Outsourcing some or all elements of HR enables leadership and other staff to leverage the expertise of a highly experienced HR team, focus on mission-critical work, create operational efficiencies and improve HR effectiveness, employee engagement and retention.

However, despite all the potential positive outcomes, you might have some concerns about outsourcing your organization’s HR function to an outside partner because you’ve been misinformed about how the process works. Here are some HR outsourcing myths and why they’re simply not true:

Myth #1: Outsourcing HR is too expensive for nonprofit organizations.

You can customize an outsourced HR program to fit within your organization’s budget and meet your HR goals. Do you need one or more full-time HR professionals on your team? Do you need just a day or two of support each week? Even less? All of these options are possibilities when you work with an outsourcing partner like Nonprofit HR. Even if you’re a lean team with a tight budget, we can structure an outsourced HR solution that will meet your organization’s needs.

And while outsourcing your HR can be less costly than an in-house HR team, it is tremendously valuable. When you outsource to a firm, you benefit from the experience of a seasoned team of HR experts who have solved challenges like yours for many other organizations.

Myth #2: Outsourcing partners can only handle paperwork and administrative work.

You may be under the impression that an outsourcing partner won’t be able to assist with strategy and people-focused projects in areas like performance management, culture and engagement and talent development. But that couldn’t be further from the truth. An effective HR partner will embed themselves in your organization and function just as an internal HR leader would.

Outsourced HR consultants can help your team with any or all of these tactical and strategic functions:

  •      Talent acquisition
  •      Onboarding & orientation
  •      Employee relations
  •      Compliance
  •      Policies & procedures
  •      Benefits design & administration
  •      Employee learning & development
  •      Leadership coaching & support
  •      Performance management
  •      Workplace culture
  •      Talent management & workforce planning

Of course, the administrative components of your human resources function are important, but they’re not the only thing a qualified outsourced HR partner will oversee.

Myth #3: Your staff won’t feel valued if your organization doesn’t have an internal HR manager or team.

Some organizations are concerned that outsourcing their HR will seem like a move to de-prioritize talent and culture.

But as long as you position it appropriately and communicate effectively, your staff will see your decision to outsource HR as an indication of the value you place on their wellbeing rather than a move to put their needs on the backburner. They’ll understand that, with the help of an expert, outsourced HR partner, the organization will be able to stay on the cutting edge of talent and culture best practices and develop a best-in-class approach to HR.

Myth #4: An HR consultant won’t give your organization the attention an in-house team would.

When you outsource your HR function to Nonprofit HR, you can rest assured that your assigned HR Business Partner(s) will give your employees as much or more time and care as an in-house HR manager would. At Nonprofit HR, we carefully assign HR Business Partners to clients based on their tactical and strategic specialties and the unique culture of each client organization. Business Partner portfolios are crafted to ensure balanced workloads, client responsiveness and flexibility.

Myth #5: Outsourcing is “one size fits all.”

You might be worried that when you outsource your HR function, you’ll lose the ability to customize your talent strategy and approach to align with your mission, culture and other factors that make your organization unique. You don’t need to be.

At the onset of every HR outsourcing partnership, we spend a great deal of time learning about your organization, its strategic direction and its unique needs. We then tailor our approach accordingly, just as an internal HR leader would.

And you’ll never be limited to a “one size fits all” set of services. At Nonprofit HR, we offer a wide range of HR, talent and culture services that––through 17 years of experience in the nonprofit sector––we’ve found to be most critical to organizations like yours, and we’re able to work with you in any or all of these areas during our partnership.

One month, you may choose to use your outsourcing hours to focus on a specific project, such as a cultural needs assessment or benefits review. The next, you might use that same set of hours to have us conduct a search for a new leader or to manage your performance review process. One of the most valuable aspects of an outsourced HR function is that it is flexible and can evolve as your organization’s needs change.

Myth #6: Your outsourced HR professional won’t understand the unique needs of the nonprofit sector.

As you well know, nonprofits think about and manage talent and culture differently than for-profit organizations. Your focus is on maximizing mission impact, not maximizing financial returns. And a variety of other factors, from limited budgets to the fiduciary oversight of your board and funders, also impact your approach to HR. It’s important that the outsourcing partner you choose to work with understands these unique social sector nuances, and there is no firm more attuned to the needs of nonprofits than ours.

Nonprofit HR was founded to fill a gap in the marketplace for social sector-specific HR outsourcing and consulting. Most of our team members spent time working in the nonprofit sector prior to joining Nonprofit HR, and because we work exclusively with nonprofits (and have for 17 years), we’re better positioned to serve the outsourced HR needs of social sector organizations than any other firm.

What are you waiting for?

Organizations that outsource their HR function report significant positive changes in team performance, employee engagement and retention and even mission impact. If your organization is hungry for those kinds of results, we’re here to help.

Contact us today to learn more about how outsourcing your HR function could help your organization achieve its goals and drive more change for the causes and communities you serve.

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