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What are the benefits of having an internal HR department vs outsourcing?
What are the benefits for a SMB to have an internal HR department vs. outsourcing it?
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2 Answers
Not a scientific study but here are my initial thoughts:
Some internal benefits:
- person has real commitment to business
- person can build rapport with employees
- can contribute to company goals (outside the HR remit) if part of the key management team
Disadvantages:
- cost, employment liability
- risk of function becoming subservient
Some external benefits depending on how outsourced:
- provider can bring a wider perspective from variety of industries
- easier to get rid of the provider if there is no fit
- more likely to get an independent view
Disadvantages:
- can be more expensive if usage is heavy
- employees may feel distanced
As a business owner it is important for you to focus your time on one thing growing your business. However, there will be times when you will find it useful to have support on the people issues facing you and your organization.
How you decide to fill this HR need insourced vs outsourced really comes down to your personal preference. Either approach can work. Since it appears you do not have a dedicated resource at this time, my suggestion would be start with an outsourced model. As part of this outsourced model ask the firm you select to give you a formal recommendation after about 6 months as to what approach would work best for your company and why. Then you can decide how best to proceed for the future.
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