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The trend of reducing or eliminating human resources: Is it worth it?

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Many businesses find themselves in a constant state of motion and making decisions, as well as making changes that they may not have considered just a few short years ago. These may be associated with various trends, including the current trend of reducing or eliminating the HR department.

This is something that can have benefits for companies but there may also be issues that are associated with the elimination of those employees. Here are some of the things that you should consider as a business owner.

According to 2012 statistics, employers in the United States had a average of 1.54 HR professionals for every 100 employees within the company. The median annual wage of those HR professionals is $51,000.

Obviously, one of the reasons why companies are choosing to eliminate the HR department is to cut expenses. When you consider the fact that HR professionals are responsible for a wide variety of functions within the company, from making sure that the paychecks are correct to acting as an intermediary when problems exist, there are certainly issues which could result when the department is eliminated suddenly.

Another reason why companies may be reducing their human resources department is to provide additional freedom for the other management services. In many companies, the traditional role of the HR department has grown to the point where it has a hand in almost every part of the operation of the business.

This could have a negative effect of reducing the flow of the business with unnecessary processes and inefficient policies. By reducing the HR department, you help to improve the management structure and in some cases, cause the employees to be accountable for many of their own actions.

Of course, making a drastic change, such as eliminating the human resources department can have a negative effect on the company. Many companies have turned to outsourcing part or all of the responsibilities of human resources, such as the administration of benefits or the responsibility of payroll rather than eliminating them completely.

Turning to a quality human resources outsourcer, such as BayPoint can help to reduce those growing pains and the issues that may be associated with the elimination of the department.

When drastic changes are made within any business, there are bound to be both benefits and negative consequences that are associated with it. When you make a large change, such as reducing or eliminating your human resources department, it can have an effect on everyone within the business from the managers to the employees.

Although issues may exist, they are often short-lived and through proper outsourcing and with the passing of time, they are less likely to cause long-term problems with your business. It is an issue that you may want to consider in the growth of your business and it is one that can help your business to grow.

Sources:

  1. Lauren Weber, “Companies Say No to Having an HR Department,” Wall Street Journal, http://online.wsj.com/news/article_email/SB10001424052702304819004579489603299910562-lMyQjAxMTA0MDEwNzExNDcyWj.
  2. Human Resource Solution,” BayPoint Benefits, http://baypointbenefits.com/index.php/solutions/human-resources.
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