Human Resources: Insourcing vs. Outsourcing

One of the core responsibilities of a steward is to ensure the interests of the owner are protected. In my case, I’m a steward of a business that God has given to me. And in this business – as with any business – one of the core risks that must be managed is exposure to liability in the employer/employee relationship. Given the nature of our litigious society and it’s increasing violence, risk management would indicate that giving an inordinate amount of resources toward managing risk in the human resources arena is prudent. This is the stance that I have taken, which is why I’ve steadfastly held to the notion that having a full-time HR person is essential to mitigating risk for my business.

However, it occurred to me just yesterday that the one reason a business owner might outsource HR work and compliance efforts is to not just lower risk, but to share risk with another firm that is willing to shoulder the legal exposure to litigation and judgments, should something like this ever occur. The chances are high – very high, IMHO – that your business and mine will be caught up in a litigation matter at some point in its’ life. The one thing a full-time employee cannot do is spread around the risk to another firm.

If you own a company, the one reason you might consider outsourcing HR is from a risk management perspective.

Bill English, CEO