HR Outsourcing Trends And Statistics Smbs Should Know

HR Processes For Business Growth

Small and medium-sized businesses (SMBs), including outsourced HR London firms, face unique challenges when it comes to human resources management. HR functions can be time-consuming and require expertise that may not readily exist within an organization – HR outsourcing offers a game-changing solution for SMBs across London and beyond, allowing them to focus on core competencies while realizing business success.

In this blog post, we will examine recent HR outsourcing trends and present compelling statistics that SMBs should keep abreast of to make informed decisions and remain competitive in today’s dynamic market.

Increasing Adoption of HR Outsourcing by SMBs

SMBs are recognizing the benefits of HR Outsourcing. Recent trends indicate an exponential rise in HR outsourcing among SMBs. According to a survey conducted by the National Small Business Association (NSBA), almost 40% of small businesses within the United States have adopted HR outsourcing as a strategic approach to managing their human capital resources effectively. This trend can also be found worldwide, where SMBs recognize outsourcing non-core HR functions for better business management.

Focus on Core Competencies

HR outsourcing among SMBs is increasingly popular to hone in on core business competencies more efficiently and improve productivity and innovation. By delegating HR functions to external experts, SMBs can dedicate more resources and time to their core activities for increased productivity and innovation.

Cost Savings and Efficiency

Efficiency is one of the primary motivations for SMBs to choose HR outsourcing. By outsourcing functions such as payroll processing, benefits administration, and recruitment to external providers, businesses can lower overhead costs associated with maintaining an in-house HR department and gain access to specialist technology and expertise that enhance overall operational efficiency.

Recruitment Process Outsourcing (RPO) Gains Momentum

Recruitment Process Outsourcing (RPO) services have seen an exponential surge in the SMB segment. Various studies show that more and more of SMBs in the UK are utilizing RPO services for talent acquisition purposes; RPO providers offer tailored solutions with sophisticated tools and strategies to attract top talent while streamlining hiring processes – something especially vital in today’s highly competitive job market.

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Employee Engagement and Retention

Small- to mid-sized businesses (SMBs) are becoming increasingly aware of the link between employee engagement, retention, and HR outsourcing. A Gallup study discovered that companies with highly engaged workforces experience 21% higher profitability. HR outsourcing partners can assist SMBs by developing employee engagement strategies, conducting satisfaction surveys, creating positive work environments, and increasing retention and talent retention rates.

Emphasis on Learning and Development

Learning and Development (L&D) outsourcing has quickly grown in popularity among SMBs as they recognize its benefits for upskilling their workforce. According to Training Industry Magazine’s study, approximately 47% have outsourced some or all of their training functions – which allows access to an expanded selection of training resources such as e-learning platforms and specialist providers, ultimately creating more skilled employees that help increase competitive edge and make for more robust and more skilled business operations.

Impact of COVID-19 on HR Outsourcing

The COVID-19 pandemic has had an enormous influence on HR outsourcing services. Small and Medium Size Businesses faced unique challenges during its spread, and HR outsourcing became a lifeline for many SMBs during this crisis. A National Association of Professional Employer Organizations (NAPEO) survey discovered that 66% of businesses partnered with PEOs felt more equipped to navigate workforce-related challenges during its outbreak.

Compliance and Legal Support Outsourcing on the Rise

Staying up-to-date with constantly shifting employment regulations can be difficult for SMBs. That’s why there has been an upsurge in compliance and legal support outsourcing functions; HR outsourcing providers offer assistance by keeping up with labor laws, creating compliant policies, handling legal matters efficiently, and mitigating risk through penalties or legal disputes.

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Benefits of Technology-Driven HR Outsourcing

Technology-driven HR outsourcing is revolutionizing how SMBs manage their HR functions. Cloud-based HRISs (Human Resource Information Systems), applicant tracking systems, and payroll software have become crucial parts of outsourcing partnerships; these technologies streamline processes while improving data security and providing real-time analytics for better decision-making.


HR outsourcing has become essential for Small and Midsize Businesses looking to compete successfully in today’s increasingly complex business landscape. SMBs’ increased adoption of HR outsourcing indicates its numerous benefits – cost savings, focus on core competencies, improved efficiency, and enhanced employee engagement.

Trends such as RPO’s rise, an emphasis on employee engagement learning & development programs, and the COVID-19 pandemic’s impact are proof positive that outsourcing HR plays a pivotal role in meeting challenges while spurring growth and managing challenges while stimulating business expansion and expansion plans.

SMBs that embrace HR outsourcing and stay informed on current trends and statistics can access expert knowledge, cutting-edge technology, and strategic support for building an engaged and robust workforce. HR outsourcing will play an essential role in SMB success as they face evolving market landscapes, helping them thrive and reach their goals more successfully than ever.

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