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3 Reason why you should keep the HR function in house

Uncategorized Jun 01, 2018


Three reasons why you should manage HR from the inside out.


As a business owner you might at a certain point wonder if you need to keep managing your Human Resources from within your organization or outsource it to either an HR Consultant or a PEO. After managing an HR Firm for over 7 years, let me explain why you should keep HR in house.

 1.    You know your company and your people best.

HR is all about managing risk and managing your culture. As the professional responsible for the people and the culture, you know what works and what doesn’t. An HR Consultant is supposed to spend time with your organization to provide you with the right advice. But they can’t, they don’t know this employee that has been with the company and has earned his stripes. It is impossible to understand the company’s way of doing things, without spending a significant amount of time learning the culture of the company.

As an HR consultant I remembered a case, where I explained to a manufacturing company that having their employees work 12-hour days, was a request for incidents and production loss. The company changed the schedule based on my advice. They created 8-hour shifts, and employees had to work 5 days a week. It was a nightmare, it was hard to get the number of employees that could work those shifts, the current employees hated the fact that they had to work five days a week, instead of the 3 or 4 days a week that they had been doing for year. The result was a shortage of labor. Looking back, what I should have advices is to look at how employees were taking their breaks, and how people could refresh their minds. This would have been a lot less disturbing to the organization, and probably would have increased engagement. The only way I learned what I had done wrong, was by spending months with the company. This learning curve could hardly be called an investment of the consultant.

The company hired a consultant to increase engagement and reduce incidents, they got the opposite. We as HR Consultants will not be able to learn your organization fast enough that our cost would justify your gain.

 2.    Your risk is not as big as others tell you it is.

Many HR professionals focus on assumed risks for the company. Running a business involves taking risks. One the best examples is the description of the jobs. These documents take hours to create and are needed when an employee does not perform, request an accommodation or when there is a dispute about the responsibility of the employee. We have never created the detailed job description for every single employee. The reasons are, it only happens once in the blue moon that a request for an accommodation is being made. And it hardly happened that an employee request this accommodation, for one of its primary function of the job. But what would have happened when the request would have been made and you didn’t have this critical document. It is simple, you work with the employee to create one. Is it a hassle? Yes, it is. But just think about the investment it takes you as an organization to create and then update those multipage documents.

Another example is a policy that is never followed and with that becomes worthless in case somebody does not follow this policy. An employee twisted his ankle stepping down a forklift. The action was that throughout the building it became a requirement to walk up and down the stairs with two hands. Can you imagine being in an office and simply carrying a binder up or down a stair? According to this policy you are not allowed to do this. Time wasted. You as a business owner you know that it is time wasted, and for that reason, you saved yourself money.

We can go on and on with examples of processes or documents that are created for .

 3.    Your risks and liability cannot be outsourced

With hiring an HR Consultant or signing up with a Professional Employer Organization, you might feel that problems with employees and federal and state agencies are thing of the past. Sorry to bring you the news, but they are not. You are responsible for all documents, all processes and all filings that are being done on behalf of you. And because you outsourced it, it was out of sight and so out of your sight. Many PEO’s realize that their old selling point of reducing risk is not true. They are now selling you the benefit or reduced healthcare cost due to their size. With that you also give away some of the flexibility to create your own culture, policies and ability of managing risk.

Now you understand why you need to keep your HR managed inhouse. The question that might arise is how do you get the knowledge to do this correctly? First of all you need to make sure that you have the resources available to find answers, learn about best practices and understand how to learn how to know what you don’t know. Second you need to have a plan in place. Get insight of the strength and weaknesses of how you manage your human resources. With that get an implementation plan in place. Learn as you go, reach out to professionals when needed to get quick answers and roadmaps.


What can we do for you?

Here at Cultural Chemistry we offer the knowledge and the resources to help you keep or bring your HR function in house. Learn more what we do for the price less then a cup of coffee a day.


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