How Much Does It Cost to Outsource Human Resources?

Outsourcing departments is a great way to streamline your business.  New start-ups, in particular, can benefit from delegating certain business functions to outside interests.

Human resources is a common choice for outsourcing, as it doesn’t directly deal with the workings of most businesses. Especially as health care programs, retirement plans, and employment laws become more complex, outsourcing HR can help you keep up with federal and state regulations, administer benefits, manage payroll, cultivate company culture, monitor employee retention and satisfaction, measure organization initiatives, and reduce recruiting costs.

Read on to discover how much it costs to outsource human resources. The following topics are discussed:

  • Recruiting Costs
  • Employee Documents
  • Job Descriptions

Recruiting Costs

Recruiting costs can be calculated by a cost per hire formula:

Cost per hire ($) = [Total External Costs] + [Total Internal Costs] / Total Number of Hires

External costs include advertising and marketing expenses, background checks, job fair and campus recruiting expenses, consulting services, contingency fees, drug tests, travel expenses for the candidate and/or recruiter, and technology costs.

Internal costs include the cost of recruiting staff, recruitment learning and development, software and hardware expenses, employee referrals, and government compliance.

Although this equation gives you an estimate of how much it will cost to recruit, interview, hire, and train an employee, it does not account for quality and efficiency. At the end of the day, who cares about a low cost per hire if it will create high turnover, lost productivity, and conflict between team members and departments?

Employee Handbook

An employee handbook is a comprehensive and legally sound manual that sets expectations and policies, protects both the employer and employees, and conveys performance parameters and benefits.

Outsourced HR professionals can implement their specific knowledge of employment law and the standard practices of the industry as well as audit existing policies that are in need of revision.

At Rush Recruiting & HR, we are based on an hourly fee structure with no contractual obligations or minimums. Depending on the size of the company and industry, the amount of time to draft, review, and finalize an employee handbook is dependent of all of the policies that are important to the organization.

Learn more about our employee training and orientation materials.

Job Descriptions

Job descriptions clearly define duties and parameters for advancement in an agreed upon document.

When you outsource the responsibility of writing job descriptions to a trusted HR team, they can help you build a streamlined, effective team from an objective viewpoint. The costs of that sort of objectivity pale in comparison to the value your company will reap.

Consult Rush Recruiting & HR

We have delivered award-winning HR services to businesses throughout the Portland metro since 2009. Our team of HR professionals help create the framework necessary to achieve your company objectives with a qualified workforce that can you depend on.

Contact us today for a complimentary consultation!

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