Can small businesses afford to outsource? Can they afford NOT to?

Whether you are just starting your business, or you are working on growing it, for every function that needs to be accomplished you have a choice of hiring someone as an employee to perform it, or to outsource it. There are advantages and drawbacks to every solution, but for entrepreneurs and small business owners, you don’t often have the luxury to engage in too much trial and error at this level. Having worked with many business owners as well as launching several start-ups, I know this can be a confusing and intimidating area. Here are some things to consider when deciding to hire, contract or outsource a role for your company.

What is your core function?

There are many things that have to happen to create a successful business. Most of the time, business owners have a service or product that they are passionate about providing to their target customer. It may be an innovative way of doing something, or it may just be something you’re really good at and enjoy doing, but whatever it is, this is your core function. In most cases, you want control over your core, so usually when you can’t do the work yourself, you will hire employees to do the core work. There are times when you will use independent contractors (1099 workers) to perform core functions. This is a bit risky and many times businesses incorrectly classify employees as contractors (usually to save payroll taxes or other employee-associated costs).  If you are using independent contractors it’s a good idea to verify with a CPA or Attorney that you have correctly classified these folks.

Besides your core functions, there are a myriad of support and associated functions that are required for operating a successful business. Every business at one point or another has legal issues, needs to declare a business structure and pay taxes and for quite some time business owners have become accustomed to outsourcing bookkeeping, CPA work and attorney. As Affordable Health Care storms through the land, most business owners have also started working with brokers and third party administrators on benefits and ERISA compliance. There are some excellent brokers and compliance administrators that are so good, and so affordable, that it’s almost impossible not to make the decision to use them rather than attempt to navigate the storms of COBRA and ACA alone.

But we are also seeing an upsurge in business process outsourcing, and leveraging outsourced providers for functions that businesses have traditionally either done in-house, paid big bucks to large consulting firms for or just not done. Some of these functions are social media marketing, human resources, purchasing and even accounts payable or receivable. This is really exciting news! For smaller businesses, it offers flexible access to high quality talent and assistance without inflated labor costs and more importantly, allows businesses to focus on their core competency and not attempt to become masters of all trades. It also offers consultants a way to leverage their expertise across a broad client base, ensuring revenue stability as well as variety.

As a Human Resource and Recruiting process outsourcer, I can offer my smaller clients some benefits that they just won’t see from other options. My business model is based on the fact that small businesses really don’t need a high powered HR Executive working for them full time – but they do need access to one. They need help setting up their HR policies, processes and general workflows. Sometimes there are scary harassment allegations or restructuring issues to navigate, and sometimes they need help hiring an HR Generalist or Administrator onto their team, including training or even managing that person. Having someone like me (or my associates) to assist with that on an on-needed basis is invaluable.

Sometimes company owners need someone to coach or train their managers and they don’t want to send them to a cookie-cutter seminar and they also can’t justify a big name consulting firm to come in. That’s where we can provide immense value. With multi-industry experience, we can ensure managers receive relevant training AND direction in applying the training that translates directly to the bottom line. It’s also a great resource when embarking on a management retreat, strategic planning session, compensation overhaul or succession planning. Having a talented strategic advisor when you need it is like having a secret weapon at your disposal.

For larger clients who have high volume recruiting or strategic sourcing needs, Source2 is one of the best Recruiting Process Outsourcing providers I know of. Their customer service and operational excellence is second to none and they do on a large scale what Limitless HR does on a smaller one for clients-including individualized reporting, analytics and support.

There are other business process outsourcers who focus on purchasing, AP, or IT that provide similar value.  I work with several of these providers and am amazed at the range of options that are available. Whether it’s the “Buyer for Hire” program that Innovative Advancement uses, or implementing cloud-based solutions to provide IT services for any business size and need, as Tanet does, or helping design and execute your social media marketing with Stay Visible Marketing, there are options and solutions for every need. As a business grows, it may make sense at some point to transition from outsourced to in-house employees. Your provider will likely be able to assist you with this transition and even hire and train your team.

The whole idea behind outsourcing is to keep you and your team focused on your core functions, while maintaining peace of mind that the other functions are being managed effectively. If you would like to explore this solution in a complimentary, no pressure, discussion, please reach out at


Current areas supported by Limitless HR Solutions:

·      Human Resources Compliance

·      Recruiting

·      High volume recruiting, direct sourcing and staffing and search solutions (Source2)

·      Management Training

·      Leadership Development

·      Compensation/Wage Banding/Job Descriptions

·      Coaching


Referrals for the following providers also available:

·      Background Checking

·      Purchasing

·      IT

·      Social Media Management

·      CPA/Accounting

·      Benefits Broker

·      Benefits / ERISA Compliance