The Case for Outsourcing HR: Supporting Small Businesses and Empowering Employees

If you know me, you know I enjoy data related to all things HR. I recently discovered some alarming statistics I’d like to share with you as a business owner. According to a March 2024 study released by Secure Data Recovery, more than a third of U.S. workers say they don’t trust their company’s human resources department, citing reasons such as bias, favoritism, inconsistency, lack of employee care, and lack of confidentiality. 

Does this surprise you? 

The study went on to say that among those who work in small companies with fewer than 50 employees, 47% said their company’s HR structure is unprofessional, and 43% don’t feel like they can confide in their HR team. 

Do I have your attention yet? 

In fact, 88% said they’ve worked for a small company with no dedicated HR person, and 73% have worked at a company where the HR person also had another job. For 68%, this meant working at a company where their manager also “managed” HR. 

Still with me? 

In their current roles, 64% of workers said their boss has a hand in HR operations, and 24% feel uncomfortable about it. Some of the participants reported not having an HR department means the company doesn’t care about employees, and many said they’ve witnessed upper management take advantage of there not being an HR team. 

Wishing you had a reliable HR business partner right now? 

In today’s landscape of modern business, small organizations often face numerous challenges in managing their human resources effectively. From compliance issues to talent acquisition and retention, the demands of HR can be overwhelming for businesses with limited resources and expertise. Let’s explore the benefits of outsourcing HR for small businesses and shed light on how employees can suffer when these essential functions are neglected.

Why Small Businesses Should Outsource HR:

  1. Expertise and Compliance: Outsourcing HR allows small businesses to access the expertise of seasoned professionals who specialize in navigating the complex landscape of employment laws and regulations. By partnering with an HR outsourcing provider, businesses can ensure compliance with legal requirements and minimize the risk of costly penalties.
  2. Cost Efficiency: Managing HR in-house can be financially burdensome for small businesses, especially when considering the costs associated with hiring and retaining HR staff, investing in technology and infrastructure, and providing ongoing training. Outsourcing HR offers a cost-effective solution by providing access to comprehensive HR services at a fraction of the cost of maintaining an internal HR department.
  3. Focus on Core Business Functions: Outsourcing HR enables small business owners and managers to focus their time and resources on core business activities that drive growth and profitability. By entrusting HR functions to external experts, businesses can streamline operations, improve efficiency, and devote more attention to strategic initiatives.
  4. Scalability and Flexibility: As small businesses grow and evolve, their HR needs may fluctuate. Outsourcing HR offers scalability and flexibility, allowing businesses to adjust services and resources according to changing requirements. Whether it’s scaling up during periods of growth or downsizing during economic downturns, outsourcing provides the agility needed to adapt to shifting business conditions.

The Impact on Employees When HR is Neglected

  1. Lack of Support and Guidance: Without dedicated HR support, employees may feel unsupported and uncertain about their rights, responsibilities, and career development opportunities within the organization. This can lead to disengagement, low morale, and ultimately, decreased productivity.
  2. Increased Risk of Compliance Violations: In the absence of proper HR oversight, small businesses may unknowingly violate employment laws and regulations, exposing themselves to legal risks and liabilities. Employees may suffer the consequences of non-compliance, ranging from unpaid wages and discrimination to unsafe working conditions.
  3. Limited Access to Benefits and Resources: HR outsourcing can provide small businesses with access to a wide range of employee benefits and resources, such as healthcare plans, retirement savings programs, and professional development opportunities. When HR is neglected, employees may miss out on these essential benefits, impacting their overall well-being and job satisfaction.


Outsourcing HR is not just a strategic decision for small businesses—it’s a vital investment in their success and the well-being of their employees. By partnering with an HR outsourcing provider like HR NOLA, businesses can gain access to the expertise, resources, and support needed to navigate the complexities of HR management while empowering their employees to thrive.

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