In my new role as an entrepreneur where I support companies including startups and scale-ups as a partner in sustainable growth in the field of HR and Legal (employment law) I often use the term HR As a Service. But what exactly do we mean by this and what are the benefits?
HR as a Service (HRaaS) refers to outsourcing HR functions to an external professional. In practice, this can be done in 2 ways, outsourcing HR tasks or insourcing an HR expert. Outsourcing is the process of hiring an outside HR professional not affiliated with the company to perform specific tasks. Insourcing, on the other hand, is a business practice performed within the operational infrastructure of the organization, usually by an Interim or hired HR expert.
Why does a company choose this? It offers organizations in a growth phase such as startups and scale-ups major benefits such as:
Cost-effectiveness: HRaaS precisely enables these types of organizations to keep a grip on the costs for an internal HR expert. Instead of contracting HR personnel on a PT or FT contract, organizations can hire an HR professional for 1 or 2 days a week or on a project basis and for a maximum of 4 months. This eliminates the need for additional infrastructure, office space and ongoing costs for HR management.
Expertise and specialization: HR professionals who work in this way often specialize in different areas, such as in my case employment law, HR strategy, change management, workers councils, organizational development, and compensation.
Scalability and Flexibility: HRaaS experts are agile and agile when it comes to scalability and flexibility to meet the changing needs of an organization. Whether the organization is experiencing rapid growth, downsizing, or restructuring, the HRaaS professional can quickly adapt to these changes. The service can be easily scaled up or down based on the requirements of the organization.
Time savings: Outsourcing HR issues frees up valuable time for the entrepreneur and his colleagues, so they can focus on their core activities and spend their time and energy on strategic initiatives that drive business growth. After all, many HR tasks such as recruiting, employee onboarding, payroll processing and benefits can be extremely time consuming.
Compliance and risk management: Compliance with labor laws and regulations can be a challenge, especially for the smaller startups, but also scale-ups and medium-sized companies. An HRaaS expert on HR and Legal has in-depth knowledge of employment laws, compliance requirements and industry regulations. They can help organizations navigate complex legal frameworks, reducing the risk of non-compliance and potential legal issues. Remember that smaller organizations might be at risk because their contracts and procedures are not up-to-date and are therefore not “compliant”.