HR Outsourcing for Manufacturing: The Ultimate Guide

Larry Alton
Thu, 09 Dec 2021 16:38:33 +0000

Manufacturing companies face a number of unique challenges in business, so the last thing they need is to get bogged down by expensive and time-consuming Human Resources requirements. Manufacturers can alleviate this burden by considering HR outsourcing. But how exactly does HR outsourcing work? And how can manufacturers take advantage of it?

The basics of HR outsourcing

HR outsourcing for manufacturing works much like HR outsourcing for other industries. Your HR department is responsible for a wide range of tasks related to hiring and managing employees, as well as keeping your business compliant with the law. HR outsourcing is simply hiring another organization to handle some or all of these responsibilities on your behalf.

Some of these activities include:

Payroll and compensation

Your HR outsourcing partner may completely take over payroll and compensation. They'll be responsible for collecting timesheets, calculating wages, calculating withholdings for taxes, applying deductions for certain benefits, and even issuing paychecks to your employees.

Benefits administration

Most HR outsourcing firms are also willing to handle benefits administration. They can help you decide what types of benefits packages to offer your employees, shop around for the best benefits providers, negotiate the best prices, and even help your employees take advantage of those benefits.

Workforce administration

Keeping track of your employees and keeping a record of all your internal management can be very difficult for a large manufacturer. That's why so many manufacturing businesses turn to HR outsourcing firms.

Employee rewards and recognition

Successful businesses are well known for providing employees with benefits, rewards, and recognition for a job well done. Rewarded and acknowledged employees are much more likely to be productive and much more likely to stick around. The right HR firm can keep track of employee milestones and issue rewards when appropriate.

Conflict resolution

Your HR firm may also be able to play a role in managing and mitigating conflicts that arise between your employees, or between your employees and your organization overall.

Benefits of outsourcing your HR needs

Why should a manufacturing business choose to outsource their HR needs? There are several benefits:

Total compliance

An HR firm should all but guarantee your full compliance with the law. You'll never have to worry about whether you're meeting all your requirements.

Time savings and employee focus

Some manufacturers pursue HR outsourcing so they can save time and have their employees focus on more important tasks. Handling HR responsibilities is a massive undertaking, especially if you don't have much knowledge or experience in the area, or if your team is small. An outside firm can save you countless hours of time and stress.

Cost savings

It’s usually cheaper to work with a firm than it is to hire and manage your own internal team of HR experts.

Ongoing support and expertise

At any point, you can consult with your HR partners for expertise and guidance—which is indispensable.

More articles from AllBusiness.com:

The Benefits of Outsourcing for Small Businesses

Consider These 7 Things Before Outsourcing Your Next Project

The Pros and Cons of Help Desk Outsourcing

6 Tips to Finding and Hiring Freelancers for Your Small Business

Hiring an Outsourcing Company for Your Business? Here’s How to Find the Perfect Partner

Choosing the best HR outsourcing partner

Of course, these benefits are contingent on your ability to find an HR partner who can serve your needs.

Set a budget and a vision

Before you start your search, set a budget and a vision for the HR arrangement you want. If you know your needs and limitations going in, your choice will be much easier.

Outline your scope of needs

Prepare an outlined scope of what your needs are. It can help guide your search and provide you with assistance once you're at the negotiating table.

Compare costs

Obviously, you’ll need to compare costs for different agencies offering the same range of services.

Compare contracts

Different HR firms offer different kinds of contracts. Some are long-term arrangements, while others are month to month. Read the fine print here.

Interview

Spend time interviewing the different HR firms you're considering. How easy are they to get in contact with? Do they answer all your questions transparently? Do they seem willing to give you help when you need it?

Outsourcing HR means more time to grow your manufacturing business

With HR outsourcing in place for your manufacturing business, you'll be able to spend more time, money, and energy on the activities responsible for generating your profits. On top of that, you can rest easy knowing that your HR responsibilities are in good hands.

HR outsourcing isn't right for every manufacturer, but most manufacturing businesses will benefit from the arrangement.