Top HR Outsourcing Tips for Startups

Outsourcing your HR department to the experts is one of the best decisions you can make when launching your startup. HR is not easy, and simple mistakes you make out of inexperience or a lack of knowledge can end up being very expensive. 

Even choosing the right HR company can be tricky, because there are a lot of factors that go into the decision. What it costs, what kind of services you need, and what you want to retain control of–these are just a few of the things you need to consider when outsourcing your HR.

10 Outsourcing Tips for European Startups

Our list of outsourcing tips for startups is designed to help you make an informed decision.

Define your HR needs

Define your HR needs

Before you speak to a potential outsourcing agency, consider your specific HR needs. Not every company needs the same services, and it would be financially unwise to pay for services you won’t ever use. 

Identify the areas where you anticipate that you will need help, such as:

One great way to find out what HR services you need is to have a trusted provider perform an HR audit for you. These audits help companies of all sizes–but especially startups–identify what is going well and what needs to be fixed as soon as possible.

Research potential providers

Don’t just choose the first HR provider that comes to your mind. Rather, conduct thorough research on outstanding HR outsourcing providers. 

You should consider factors like these:

  • Experience level
  • Reputation
  • Client testimonials
  • Range of services offered
  • Multilingual abilities

It’s also important to choose a provider that aligns with your startup’s values and ethos. If someone else is going to be handling your recruitment, onboarding, offboarding,

Understand the cost structure before signing a contract

There are several different pricing structures used by HR providers, and many HR companies will provide a few different cost structures to meet their clients’ needs. Ask your potential HR company what options they provide and what you can expect billing to look like. 

These are some of the options you can inquire about:

  • Hourly or Time-Based Billing
  • Fixed-Fee or Project-Based Pricing
  • Retainer Fee
  • Per Employee, Per Month (PEPM)
  • Transaction-Based Pricing
  • Percentage of Payroll or Revenue
  • Cost-Plus Pricing
  • Subscription-Based Model
  • Incentive-Based Pricing
  • Hybrid Models

Make sure that the provided pricing module suits your budget and your growth plans.

Ask how the HR firm ensures data security and compliance

Your HR firm is going to be handling a lot of data about your company, your employees, and more. Not only is it important to your work as a company, but it’s also important for legal compliance. The EU boasts significant data protection laws for workers and consumers alike, and employers are required to abide by these rules or face serious and expensive penalties.

Find out what to expect when it comes to communication

How will you communicate with your HR provider? There are plenty of options for communicating, but you need to make sure that your preferences and needs match what your chosen provider has to offer.

For example, communication may look like any of the following, or a combination of these options:

  • Routinely scheduled phone calls or video meetings
  • In-person discussions
  • Daily or weekly email updates
  • Automated reporting

Plan for scalability

When you choose an outsourcing provider, be sure to find someone who can scale their services as your startup grows. Make sure that your outsourced HR department has the capacity to handle an increased workload over time. 

Train your internal team

Train your internal team

The services you choose to outsource will determine what your internal team needs to do–and how you need to train them. For example, let’s say you outsource your benefits administration and payroll tasks, but you keep your performance review and evaluation in-house. 

Your internal HR department will need to be trained on understanding the roles and responsibilities of each group, as well as how to safely share data between internal and external teams. If you open new communication channels between these teams, you may need to offer training and development on your chosen platforms, too.

Evaluate performance regularly

Be sure to set up some form of regular performance evaluation for your outsourcing provider. Some of the things you can evaluate your provider on include:

  • Service quality
  • Compliance
  • Cost-effectiveness
  • Data security and privacy
  • Technology and innovation
  • Scalability and flexibility
  • Employee satisfaction
  • Reporting and analytics
  • Cultural alignment
  • Issue resolution
  • Communication and collaboration
  • Continuous improvement

Encourage employee feedback

Anytime you outsource work to a third-party provider, it is essential to get feedback from the people within your company who are affected by that provider’s work. When it comes to HR, that includes just about everyone! 

Encourage your employees to provide feedback about the outsourced HR department, as this input can help you identify areas for improvement and ensure that your employees are satisfied with the outsourced processes.

Build a long-term relationship

Make it your goal to build a long-term partnership with your HR provider. Building a strong relationship will lead to better collaboration, increased levels of understanding, and more success for your startup!

Europe HR Solutions–Offering Top-Tier HR for Startups

At Europe HR Solutions, we are the ideal partner for startups seeking to outsource their HR functions. 

Our comprehensive services, expertise in European regulations, and focus on building lasting relationships allow us to seamlessly handle your HR needs. We tailor our approach to align with your company’s values and scale as you grow. 

You can trust our multilingual, experienced, and professional team of HR experts to deliver efficient, compliant HR solutions so you can concentrate on driving your startup’s success. We hope you’ll choose Europe HR Solutions as your long-term strategic HR partner. Let’s talk! 

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      About the author

      The author of this article

      Inez Vermeulen is the Founder and CEO of Europe HR Solutions, with over 25 years of successful corporate and entrepreneurial experience in various global industries. She has helped grow and expand the European divisions of global companies such as Coca-Cola Company, Regus, DHL, American Medical Systems, etc. Inez has received several company awards for her entrepreneurial spirit and success.

      She owns a Bachelor’s degree in French, History and Latin, several HR global expert certifications, a Master’s degree in Metaphysical Sciences, ICF Coach Certification and has completed her Doctorate on Transformational Leadership. Inez is fluent in Dutch, English, French, Italian and German. She works in partnership with an extensive international network of independent & professional companies and resides in Belgium near Brussels with her husband Jan.