Why is it the Best Idea to Outsource HR functions for Small Businesses?
The UAE is seeing an influx of small businesses. More and more entrepreneurs are starting a business. In fact, research shows that SMEs make up about 94 percent of the companies that are operating within UAE. In Dubai specifically, SME’s make up about 42 percent of the workforce and contribute about 40 percent to the GDP.
However, small businesses are usually at a disadvantage. They don’t have the budget to hire more people who can lead different operations. As a result, the founder of the business usually takes on multiple roles, which cause them to be overworked. One of the ways to avoid that is to outsource the operations.
HR is one of the most important departments of any business and it’s best entrepreneurs outsource HR functions if they want to run their business smoothly. Here are some reasons why:
Entrepreneurs Aren’t Experienced
Here’s the thing with entrepreneurs—they’re overworked. When they try to take all roles instead of just focusing on the area they specialize in, they can make mistakes. When entrepreneurs outsource HR functions, they can free up their time to focus on other things. Not only that, they also reduce the chances of making mistakes.
Handling employees is not an easy task. In fact, with the new rules and regulations being implemented in UAE, it’s becoming increasingly more difficult for founders to look after their employees. Small business owners make mistakes when it comes to hiring, making payrolls or paperwork. Not only do these types of mistakes cost small businesses, but the damage is sometimes so deep that it takes time to recover—if at all.
Reduces Employment Compliance Risk
As mentioned earlier, employment laws in the UAE are getting increasingly more complicated. HR professionals are skilled and well-versed in labor law. They know the ins and outs of the legal system and can help entrepreneurs avoid lawsuits. They can also help the founder spot problems in their employees and put a stop to it before the situation exacerbates.
Helps Build HR Infrastructure
All organizations want to have their own HR infrastructure at some point. It’s crucial to have some knowledge about how the HR works in small businesses before hiring a whole team. If small businesses outsource HR functions, they can easily get an idea of HR policies, procedures, benefits and payroll policies, and how different processes work
More Cost-Effective with Better Results
When small businesses outsource HR functions, it benefits the founders financially and otherwise. Some small businesses report losing out on employees to competitors because they couldn’t match the expected salary package. In fact, that’s one of the main reasons why companies lose out on potential employees.
By outsourcing HR functions, small businesses will have access to a more qualified candidate and they will also know the market competitive salary. As a result, they won’t have to offer people low salaries only for them to walk away. This, in turn, will also allow them more time to focus on other activities.
Offers Employees Benefits
A good employee benefits package makes them happier and more committed to the workplace. However, administrating benefits isn’t typically easy, especially when it comes to retirement plans or health insurance. It’s for this reason that small businesses feel at easy by outsourcing HR functions. They can relieve themselves from researching good medical plans and other benefits and focus on the more important things.
Improves Employee Relations
Workplace conflicts are common, especially if there are people coming from different backgrounds to work in the same place, as usually happens in UAE. Instead of resolving the conflict themselves, the founders of small businesses can outsource the problem to HR and allow them to mediate the conflict and reach a conclusion—thereby preventing a hostile atmosphere.
Feel free to outsource HR operations and see a marked improvement in your business!