High employee turnover can seriously affect any company's operations and development potential. Since the Great Resignation doesn't seem to be subsiding, business owners are actively looking for ways to reduce churn.
In 2023, 61% of employees are thinking of quitting their jobs. Companies that don't go above and beyond to hold on to their top talent could face significant financial losses.
One of the simplest ways to reduce churn and become an employer of choice for new talent is to outsource HR. Let's examine how outsourcing to the right HR partner can help overcome high turnover.
How HR Outsourcing Reduces Turnover
The key to low turnover rates is employee satisfaction. Achieving it can be complicated, especially if the company doesn't have significant resources or a large HR department.
Since employee satisfaction may require a comprehensive HR strategy, small HR teams busy with administrative tasks may lack the capacity to handle it.
Outsourcing HR to a qualified HR partner gives you access to a team of experts with impressive experience. They can support your employees in many different ways to ensure satisfaction, build loyalty, and improve retention.
Offers Quality Benefits
More than half of employees consider benefits packages closely before accepting a job offer. Meanwhile, according to surveys, 80% of employees prefer improved benefits over salary increases.
Unfortunately, most small and mid-size businesses don't have the opportunity to beef up their benefits package. With the rising cost of healthcare boosting insurance premiums, health benefits that a small company can offer are hardly sufficient to attract and retain top talent.
Besides being expensive, high-quality benefits require significant administrative work, including choosing the provider, setting up the most effective plans, negotiating programs, and streamlining enrollment. Managing complex benefits requires a considerable amount of working hours, which many HR departments may be unable to handle—let alone small departments.
Less expensive plans
Outsourcing benefits administration to a professional employer organization (PEO) can solve the above problems. These companies use economies of scale to give their clients access to better benefits. PEOs put all their client's employees in one pool and use this advantage to negotiate better premiums.
Manages Administrative Work
PEOs will also take over all administrative work related to benefits. They take the time to study the company's needs, choose the best benefits options, explore wellness programs, and implement them in the most effective way possible.
HR partners take over the entire benefits administration process, including enrollment and employee education. They remove the burden from the internal HR team while providing excellent benefits options to employees.
Helps with Recruitment, Onboarding, and Training
Retention tactics begin as soon as you meet a new candidate and start the interviewing process. While a potential employee sells their knowledge and experience to you, you must sell the company to them.
Investing time and money in training and onboarding only to have an employee leave after a few months of work can be a disaster for a small business.
Today, around 20% of new hires quit within six weeks of joining a company. The top reason is unmet expectations during the recruitment process.
By outsourcing recruitment, onboarding, and training to an HR partner, you delegate these tasks to a team of experts. They have the time and experience to arrange a smooth process and help the new hires build loyalty to your company from the first interaction. A PEO can also arrange high-quality training for new employees and existing talent.
Having experts at the helm can present your company as a stable and organized entity with excellent development potential.
Improves Company Culture
Excellent company culture contributes to lower churn rates, allowing employees to feel good about staying with an organization. Maintaining and improving company culture requires time many HR teams don't have.
Outsourcing administrative functions to an HR partner frees up the valuable time your HR experts need to focus on company culture and support your staff. Meanwhile, better benefits, high-quality training, and error-free payroll processing can improve overall culture.
A PEO can also help streamline your company culture by developing company policies and procedures that create a welcoming atmosphere and clarify the company's missions and goals.
Reducing Turnover and Gaining Competitive Advantage
In 2023, when companies fiercely fight for top talent by constantly looking for better employment opportunities, high-quality retention strategies are integral to success.
Since retention requires a comprehensive approach to many HR aspects, including better benefits, improved company culture, and excellent recognition tactics, small HR departments can handle it successfully.
By outsourcing administrative HR functions to a comprehensive HR partner like a PEO, it's not just possible to improve retention. It can help you become an employer of choice for the top talent in the industry.
