How does HR Outsourcing Work?
By
Allyson Fletcher
Human Resources
Starting a business can be exciting, nerve-racking, sleep-depriving, and many other things in-between. To be a business owner, you will need to have a steely resolve and dogged persistence to find the little specks of success. It’s not easy, especially in those initial days with long hours and low income. Many small to medium businesses are busy trying to grow, and as a result, they solely focus on roles that shall help support them get to the next level. Very rarely does this growth include an HR person. HR is often one of the last positions to be considered and, more often than not, is only looked upon when there are serious personnel issues within the business. This was the case for one of our clients, who, for the purpose of this exercise, we shall call “New Age Financial Pvt. Ltd.”
New Age Financial reached out to Key Business Advisors (KBA) after employing 2 new team members. The new joiners believed they were short paid and complained about it. They were not sure what Modern Award they belonged to either. The business owner thought he was paying the new employees a reasonable wage and had no understanding of Modern Awards. With the little experience he had of HR in general, this issue seemed out of his ambit. He didn’t want to risk either employee putting in a complaint through Fair Work, which would take both time and money, resources he was already lacking. The issue was one that KBA was in a position to help with as they had the expertise and staff for the right support and guidance.
In this instance, KBA asked to review their payroll and the Position Description associated with the roles. Surprisingly, the positions didn’t have any descriptions per se, so KBA helped create them comprehensively. This information was then used to consider which Modern Award the new team members fell under, and as a result, it was recognised that both the new employees were being underpaid. KBA further helped draft a letter for them and organised a consultation meeting to discuss what had happened. The employees felt heard and happy that their employer paid heed to their complaint and took the initiative to follow up and correct his mistake. They were also pleased to have a clearer understanding of their roles which would lead to better performance management in the future. The owner was incredibly contented with this outcome as any undue complaints with Fair Work had successfully been avoided. It was a win-win picture for everyone involved.
Of course, New Age Financial could have employed their internal HR person, but they weren’t in a financial position to bring someone on-board. The business was relatively new, and decision-makers didn’t know how many hours would be needed to employ somebody part-time or even on a casual basis. The advantages of outsourcing HR to a company such as KBA are that the client can choose how much support they want to receive. Meaning they know precisely how much they’re paying and the benefits they’re paying for. If New Age Financial had decided to employ internally, they would be limited to the skillset and experience of the person(s) they hired. By outsourcing your HR, you can gain a lot more experience, not just from one individual but from a whole team, to help support your business.
Since the above issue, New Age Financial has changed from being an ad-hoc client of KBA’s to a packaged client with customised hours to suit their operations.
KBA Useful Information:
- HR Advice & Support: https://keyba.com.au/hr-consulting/
- Upcoming Events: https://keyba.com.au/upcoming-events/
- HR Documents Checklist: https://keyba.com.au/hr-documents-checklist/
We invite you to join our upcoming FREE Webinar with Director, Colin Wilson and Allyson Fletcher, HR Consultant of Key Business Advisors on the 12th April 2021. Colin and Allyson will discuss the importance of implementing HR best practice in your business.
Upcoming Sales & HR Workshops – Key Business Advisors (keyba.com.au)
Topics include:
- What is HR Best Practice?
- The value of employee engagement
- Better ways to recruit and induct new staff
- Improve staff performance outcomes
- The importance of succession planning
At KBA we are a team that is passionate about taking businesses from good to great. Whether you want to grow your business, better manage your staff, ensure your business is following industry best practices, or ensuring you remain compliant, then please contacts us today as we are here to help!
If you would like help or want to know more about HR outsourcing or any of our services, please contact us at Key Business Advisors on 1300 4 ADVICE
