Have You Considered Outsourcing Your HR?

Eric Mochnacz
August 27, 2020

HR is an essential function of any business.  If you have employees, you need Human Resources.  However, the level of HR support you need depends on the size of your business, the individual needs of your company and your workforce.  When deciding how to build out your HR function, outsourcing is a viable option.  Partnering with a skilled HR consulting firm like Red Clover to scale your business and develop your people processes can make all the difference in achieving your business goals.  Read on to find out what HR processes you can effectively outsource and how Red Clover is uniquely positioned to help.

Which HR Tasks Can be Outsourced?

Before delving into the specific HR tasks that can be outsourced, consider the overall benefit of having an external partner build or fix your HR operation.  As a business owner, you may not have the HR expertise that a consulting partner can bring.  You’re also so deeply entrenched in the organization, that it’s difficult to consider problems and identify solutions from a different perspective.  It’s common for a founder or business owner to do things the way they’ve always been done, because it requires less work than trying to innovate while still keeping the business functioning.  Change is difficult, it’s only as successful as an organization’s peoples’ ability to accept and implement the change.  You, as the CEO, may not have the time to see necessary HR changes through to completion, but your outsourced HR consultant can.  They can focus on scaling your people processes while you get back to the business of running your business.

A competent HR consulting firm with skilled, certified consultants is in the position to help you develop and manage your entire employee lifecycle, from recruiting to exits.  They bring effective solutions to cut down on time to hire, employee turnover, and workforce dissatisfaction.  A progressive outsourced HR partner is one that focuses on strategic planning while recognizing strategy’s impact on the day to day tactical.  A skilled HR consultant can build your recruitment process from the ground up while being able to drop everything to manage a pressing employee relations issue.  They take the time to learn about your business, what’s working and what isn’t, and work closely with stakeholders to develop and implement effective HR solutions.  

A consultant’s ability to manage your people’s operation is why we often discourage businesses from immediately partnering with a Professional Employer Organization (PEO) without due diligence.  A number of payroll providers will often market additional HR services as part of their software suite, call it consulting, and slap on a lower price tag.  In our experience, it usually amounts to general HR templates and process automations, not company-specific solutions nor a devoted consultant committed to addressing your human resources needs.  If your business is looking to reduce healthcare costs and wants to share employee liability with a larger organization, a PEO may be the solution.  But if you’re looking to significantly move the needle and advance your HR function with customized solutions from a professional who is committed to the achievement of business goals, contact Red Clover.  Our team is ready to build your HR department and its processes from scratch or support your current HR resources as you attempt to scale.  

Recruiting and Onboarding

As you look to grow your team, a strong recruiting process is key to identifying top performers in your candidate pool while also being mindful of candidate experience.  Outsourced HR can evaluate your current process, identify areas where you may be losing candidates, and develop an updated process that meets your business needs while also respecting the job seeker’s time.  This has a long term impact on your employer brand.  If candidates have a positive experience through the interview, whether they are hired or not, they are more likely to speak positively about your company.  Also, how an em employee is treated through the recruitment process is a good indicator of how they will be treated as an employee.

As your outsourced HR partner, Red Clover can evaluate and update outdated job descriptions.  Through interviews and benchmarking, we identify the core competencies required for vacant roles in your company and integrate those competencies into the job description.  The competencies influence the Behavioral Interviewing questions we ask of candidates, where they speak to specific past professional experiences to indicate if they have the required skills for the job for which they applied.  We leverage DISC assessments to understand candidates’ communication styles and driving forces and how that will influence the work they do for your organization.  Once we’ve established a sound recruitment strategy, we then continue the positive candidate experience into a positive employee experience by developing an onboarding process with learning outcomes and covers the first 30, 60 and 90 days of your new employee’s introduction to the business.  

If you have a recruitment process that meets your needs, but your workforce plan is ambitious, and your HR Manager is overwhelmed, outsourced HR can still be an asset.  A junior HR consultant may be able to help with resume triage and initial phone and video screens to take some of the burden off the shoulders of your internal resource.  Rather than the HR Manager being ever present during the first day of onboarding, that responsibility can be outsourced to a junior consulting associate.  

Compensation Structure Consulting

There’s value in having a skilled outsider assist your business with developing a compensation structure.  The founder and the CFO may go into salary planning with a bit of bias, as they will always have the financial success of the business in the back of their mind.  They know they want to pay their people more, but they also need to make sure that the business remains viable.  An outside HR consultant, with wage and compensation knowledge, can be brought in just to look at the numbers.  Your consultant’s main goal is to develop a compensation plan that considers market rates in your region and industry in a way that won’t sink the business.  By reviewing your P&L and considering other financial influences, they are positioned to present an unbiased and comprehensive salary structure for your business.  

Red Clover outlines our approach to wage and compensation planning in our detailed off-white paper. Specifically, once we’ve developed the salary bands and compensation structure, we also develop a communication plan.  This provides leadership direction on how to explain any changes, clearly outline the company’s new compensation strategy and how the workforce can earn more as they progress through the company.  

Change Management

As I stated above, the success of any change within your business is dependent on your employees’ ability to accept and drive the change you wish to see.  Having external support, someone who doesn’t have “skin in the game”, allows a new voice with a new perspective to support and guide individual contributors through the change.  The sole goal of an outsourced HR partner is to make the business better, without any other motive, so it is conducive to trust between the service provider and the employees.  Ultimately, working with your consultant on a change management project allows your workforce to see that you’re committed to change because you’ve invested in it…everyone knows consultants aren’t free.  If you, as a business owner, are committed to change, but every attempt you’ve made to implement change has failed, your employees know it.  By making the choice to partner with an external consultant, you’re demonstrating that you are committed to change, but you need a skilled expert to do it.  If you approach your change initiatives differently,  it’s likely your employees will respond differently.  

Performance Management

Similar to recruitment and onboarding, an outsourced HR partner can help build the process necessary for an effective performance management process supplemented with management development training so your organizational leaders are equipped to have developmental conversations with their direct reports.  An HR consultant, after their initial discussion about the goals you have for performance reviews, can develop the evaluation criteria, coordinate the scheduling, and offer support to managers executing the reviews.  Read more about our approach to performance management here.

Why Work With Red Clover?

We’re not your typical HR consultants.  We’re definitely not a PEO.  Red Clover prides itself on our diverse workforce; we come from leadership positions in unique industries, not necessarily corporate Human Resources.  This allows us the opportunity to roll up our sleeves with your organization and provide unique, innovative, and different solutions to your business’s specific HR and change management problems.  Our consultants are certified through the Society of Human Resources Management (SHRM) as Senior Certified Professionals, so we bring years of experience and practical HR knowledge to our clients.  We’ve served as outsourced HR for small, medium and large businesses across all industries, ranging from information technology firms to commercial roofers – and we use those experiences to inform and influence the service we provide to all of our clients.  We are subject matter experts in the HR field – We always have to bid for the first job, but we rarely have to bid for the second.

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The Results

Construction and Contracting

A commercial roofing contractor was in hyper growth mode. They had goals to increase their field workforce to expand their service area to additional states and geographical locations. If they were to grow their field workforce, they would also need to increase their administrative, operational and sales headcount to support the additional workload created by increased field work. Additionally, they were challenged in workforce retention and development, experiencing high turnover, and did not have a dedicated Human Resources professional to manage employee relations and compliance issues that come with trying to scale a business.

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