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To paraphrase the old saying: The road to China is paved with good intentions.
For many businesses, outsourcing work overseas promises a road to business success, offering low-cost production with high quality results. For some, a business wouldn’t be financially possible at all without outsourcing.
But outsourcing isn’t easy, and trusting your business to someone half a world away takes a giant leap of faith that many aren’t ready to take. And many times, that leap has indeed ended in disaster.
How do you ensure you aren’t making a huge mistake when you start an outsourcing program? We talked to numerous entrepreneurs who’d been down the outsourcing road before, sometimes with great success stories to share, sometimes with miserable failures (“Never again!”) to report. Their collected wisdom can be found within.What work to outsource
While outsourcing of just about everything has been attempted, it isn’t always successful. One of the big determinants of success is what exactly you’re attempting to outsource, as certain tasks are generally easier than others to offload overseas. Here’s a guide to the most common outsourcing options.
Offshoring began with manufacturing, and it remains perhaps the most common target for sending overseas. Why? Cost, pure and simple. “Made in America” may be great for the country, but for many small businesses, it’s simply impossible to use a local factory or production center to make tangible goods and still turn a profit.
oDesk is among the popular sites that connect would-be bosses with overseas workers.
That said, outsourcing manufacturing is not an endeavor to be undertaken lightly. Colleen Lloyd-Roberts of Top Notch Nail Fileshas been outsourcing production of her products for nine years to both China and European factories. She says a comparable U.S.-manufactured nail file would cost 100 to 150 percent more to make—the equivalent of the price she charges her wholesale clients. Says Lloyd-Roberts, “I feel bad with all of the Americans who need money and employment, but they all want to charge so much. As far as manufacturing however, I don’t know that I’ll ever be able to get costs as low in the U.S. as I am getting now. I have made peace with the idea that I am employing people all over the world, because at the end of the day, all people have families to support, and no matter where we live, we all need money.”
Her key to success? “Settling in to a long-term relationship with a particular manufacturer,”Lloyd-Roberts adds. “My manufacturer will take back any products that are flawed. In nine years I’ve only had two issues.”
Again, success varies mainly based on who’s doing the work. Professional comedian Dan Nainan says he has two virtual assistants overseas. “They do amazing work,” he says. “One charges me $1.25 an hour, the other one charges two dollars an hour. Would you believe when I got the resumes, their English was better than those of Americans?” Thanks to VOIP, there’s no international calling barrier any more. Adds Nainan, “One of them has a Vonage account and they can call anywhere in the States for free. I had one of them call Costco to return a couple of items for me. If you call Costco trying to return stuff, they keep you on the phone for at least half an hour!”Selecting and vetting providers
So many factors go into picking an outsourcing service provider, but in our discussions with those who’ve done it successfully, a common theme kept coming up: Take your time.
Beware of “yes” men, says consultant Ransley Carpio.
Most successfull outsourcers stress that your best chance for success comes from doing far more due diligence than you think you should, and asking question after question until you’re satisfied you’ve found the right person or company to partner with.
Marissa Anwar, editor of Thirty Six Months, a debt-reduction website, outsources her design work overseas. Her tips: “Interview 10 to 12 people for each person you end up hiring. Make sure that interviews are done via both chat and Skype to make sure that there isn’t a communication barrier (verbal or written).”
Overall, language barriers are probably the #1 most voiced complaint with offshore service providers. A popular way to get around this issue? Many outsourcers suggest using contractors in the Philippines, where costs are low but where English is usually spoken as a first language.
The more questions you can ask your provider up front, the fewer issues you’ll have that arise once you start working with. Some good ones to ask, courtesy of Parliament Tutors’ David Greenberg: “Do you own your own computer? How often are there power outages in your area? Did someone help you write your response to me?”
Most outsourcers swear by third-party freelancing services to help vet knowledge worker providers, manage payments, and provide an intermediary if something goes wrong. Elance, oDesk, and chúng tôi are the big ones. On the other hand, some caution against using manufacturers’ representatives to communicate with an overseas factory. Says Lloyd-Roberts, “I use Alibaba, and every time I’d put in a request I’d get a response from the same U.S.-based rep company. Using a rep blows your margins.”Outsourcing challenges
Once you’ve found the right overseas partner, the hard work still lies ahead, and plenty of challenges await the unprepared when it comes to actually working with this person or company.
After language barriers, discussed above, the most common issue cited in dealing with outsourcing providers is that of time lag. The time difference between California and Bangladesh is 14 hours. At the end of your work day, they’re still asleep over there. While some providers keep “U.S. hours,” many do not, and you’ll need to make peace with longer turnaround times and a lack of real-time communication. The typical strategy: Bundle up all your work, send it to the provider at the end of the day, and expect to have the completed jobs waiting for you in the morning when you get in.
Another challenge, closely related to the language issue, is one of the provider simply understanding the tasks assigned and the goals of the work being performed. This problem becomes compounded the bigger the project is. A local developer may understand well what the key goals of, say, a parking spot-finding iPhone app is, and can make certain decisions about the project without having to consult you, in case information has been left out of the design spec document. A foreign developer may have no clue what the real value of the app is, and his instinct about developing it may simply be wrong.
For any project outsourced like this, information is essential. You can’t provide too much of it, and the more organized it is, the better. This may take an exceptional investment of time up front, but it will pay off in the end. Unfortunately, as programming projects migrate toward agile development principles, this type of carefully-scoped, finite design is increasingly difficult.
One aspect of outsourcing that’s not overly complicated is tax considerations. Hiring an offshore contractor should create no additional tax headaches than hiring one in-country. In fact, outsourcing overseas may actually protect you from claims that a contractor is an employee, a common problem that can arise when hiring a local contractor. If paying people overseas seems daunting, use a third party like Elance to handle the relationship.
Finally, you need to ensure you understand the culture of the outsourcing provider you’re working with. Tom Antion notes that early in his outsourcing career he didn’t understand the custom of giving a “13th month” of salary as a bonus. Until he took formal training on the local cultures he was working with, he says his outsourcing attempts were never successful.Tips for successful outsourcing
Here’s additional wisdom on ensuring your overseas outsourcing engagement is a success.
Provide examples. A detailed plan is great. A picture of what the product should look like when finished is better.
Meet regularly. “Even if everything is going well,” says Saurabh Sharma of Indus Insights, “we have discovered many new opportunities when we sit down and chat.”
Set Limits. “I had one contractor that had an open number of hours for work to be done. He gouged me for 80 hours for something I would’ve estimated to take 10,” says Veritable Ventures’ Ransley Carpio. “I’m experimenting with flat rate jobs instead of hourly now.”
Don’t take yes for an answer. Adds Carpio, “Most contractors from overseas will say ‘Yes, I understand’ and ‘Yes, I can do that’” to any question. They may not necessarily be lying, but in their eagerness to get the job, they’ll say yes to anything hoping they can figure it out as they go.
Split a project Into pieces. Outsourcing manufacturing? You don’t need to outsource product design, too. Working with a local design firm to ensure you get the exact design you want can save time and offer better results. Similarly, if your product has both a hardware and software component, those projects can be split so that an offshore provider only handles one side.
Start small. A modestly-sized sample project can go a long way toward making sure you and the provider are a good fit.
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Last week, Google announced the first developer preview release of the upcoming iteration of Android OS: Android 11. We already discussed some of the major features that are present in the earliest build of Android 11 while more of those are expected to come as we near the Google I/O 2023 event that’s set to happen later this year.
However, Google has already given us a glimpse of what to expect privacy-wise from Android 11. Here is a list of features that the Mountain View giant has added in terms of privacy and security inside Android 11.
RELATED: Samsung Android 11 update release date and device list
Last year, Google updated its permissions manager by adding a new “Allow only while in use” access to your apps. With Android 11, the company is now expanding its focus on privacy by bringing one-time permission. You can grant an app access to your location, microphone, or camera for only a single time and the moment you move away from the app, the enabled permission will be switched off.
You can enable one-time permission for an app by selecting the “Only this time” option when prompted.
Android 10 was set to limit storage permissions to apps by restricting them to access only the directories required for usage. The feature never came into existence but with Android 11, Google is enforcing Scoped Storage on all apps that are targeting Android 11. This way your apps remain inside a data sandbox so that they cannot access data outside the parameters without your explicit permission.
The introduction of Scoped storage means that apps will no longer need to request permission to view and modify all the files in your storage.
Upgraded Biometric levels
Google is making it easier for developers to support all kinds of biometrics available across Android. BiometricPrompt will support three authenticator types – fingerprint, 3D facial recognition, or iris. In addition to that, Android 11 also brings different levels of granularity inside BiometricPrompt — strong, weak, and device credential. Developers can decide which level of biometric authentication granularity is needed for their app and request for the same.
Support for Identity credentials
With Android 11, Google has added support for secure storage and retrieval of verifiable identification documents. Android 11 Developer Preview 1 has finally started supporting ISO 18013-5 compliant mobile driving licenses
The new IdentityCredential API is supported by the Secure Processing unit inside Qualcomm’s latest Snapdragon 864 chipset but without support for Direct Access mode. This mode will allow users to verify their stored electronic ID even when their device is out of juice.
Reviewing and preventing apps with background location access
The company has updated its Google Play Policy to make sure apps can only request access to location when truly necessary. Google plans to roll out a modified Google Play policy with background location in focus and will enforce that all new apps (from August 2023) and existing apps (from November 2023) request background location only according to the new policy.
Last year, Google announced Project Mainline as a means to push security updates through Google Play. The company is now adding 12 new modules to the existing 10 modules under Project Mainline to cover as much range as is possible for updating via the Play Store. The new modules focus on rolling out changes in terms of permissions, performance and ensuring consistent APIs across different apps.
Gaming with iPhones show that they need proper heat dissipation
A test of the iPhone 13 Pro Max and the Nubia Red Magic 7 shows that the former needs a good heat dissipation system. The test uses both smartphones to play “Genshin Impact” for about 20 minutes. The picture quality was set to extremely high quality, and the frame rate was 60 frames.
The test reveals that the average temperature of the back cover of the iPhone 13 Pro Max is 43.2°C. Also, the highest temperature is 46.6°C while the lowest temperature is 38.0°C. Because the frame is metal, it feels obviously hot. The average frame rate of the game is 53 and it runs relatively smoothly. However, mid-way through the game, there were some stutters.
For the Nubia Red Magic 7, the average temperature of the back cover is 41.3°C. The highest temperature is 44.0°C while the lowest temperature is 35.5°C. Although the frame of the Red Magic 7 is also metal, we can barely feel the temperature because of its cooling fans. The average frame rate of the game is 59, and it runs very smoothly, with almost no stuttering.
From the game test results of the iPhone 13 Pro Max and Red Magic 7 playing “Genshin Impact”, the iPhone 13 Pro Max is not as good as the Red Magic 7 in terms of the temperature of the back cover or the frame rate of the game.
This shows that Apple may need to pay attention to the cooling of the iPhone. However, it is not. Here are the most probable reasons why the iPhone does not pay attention to heat dissipation1. Apple’s pursuit of design and beauty affects heat dissipation improvement
If the heat dissipation material and other components are to be installed at the same time, this will inevitably lead to a thicker and heavier fuselage. This is unacceptable for Apple’s iPhone which pursues a thin and light feel design.
Dismantling the iPhone, iFixit reveals that the internal structure of Apple’s latest iPhone is very compact. The placement structure is simple and orderly. If it adds heat dissipation materials, it will conflict with the simple design beauty principle inside Apple’s iPhone.Gizchina News of the week
Join GizChina on Telegram2. Apple’s “uniformity” checks heating issues
It is easy for Apple to control parameters that raise the temperature of its devices. This is because of the “uniformity” of Apple’s ecosystem. For Android, we have the open Android system + third-party manufacturers’ hardware + open third-party application stores. The design at any of these levels could cause the device to heat up easily. Thus, there is a need for a proper heat dissipation system.
However, for Apple, Apple’s iOS system + Apple’s hardware + Apple’s closed application store. Thus, Apple is in control of all the levels along the way. We can simply characterize the iOS camp to have a “uniform and central” nature. This uniform nature makes heating not much of an issue.
For example, the same application software running on different brands of Android phones will basically have a large user experience gap due to different optimization and hardware configuration. In order to have a better user experience, Android mobile phone manufacturers must stack materials. This includes paying attention to heat dissipation, in order to obtain a better user experience.
Apple’s iPhone is different. Its powerful hardware configuration, coupled with the unified App Store checks the quality of application software. This enables the iPhone to obtain a better user experience.3. iPhones do not heat up during short gaming
iPhone users buy the device for prestige, taking pictures, communicating and sending text messages, and occasionally gaming. This also means that there are not many scenes and time for the heat dissipation to play a role. Perhaps, Apple thinks it is unnecessary to pile up heat dissipation materials for usage scenarios that are not so common.
In addition, if consumers are not satisfied with the user experience of playing games on the iPhone, they can buy Android phones with better heat dissipation. Apple is open to users buying Android phones. Once upon a time, Apple CEO Cook directly recommended consumers to buy Android phones in response to consumers calling for Apple to open up third-party application installations.4. Apple’s powerful hardware sometimes permit gaming in power-saving mode
As we all know, Apple’s hardware performance has always been ahead of the Android competitors. Taking the A15 versus the new generation Snapdragon 8 Gen 1 as an example, test results show that in terms of CPU multi-core, the energy consumption ratio of A15 is 570 points/W, while the Snapdragon 8 Gen 1 is only 343 points/W. This means that the Android flagship processor is nearly 40% behind. Although the Dimensity 9000 will reduce this gap, the reduction will not be significant.
The same is true for the GPU energy consumption ratio. The Snapdragon 8 Gen 1 is 3.84 points/W, while the A15 is 6.84 points/W. The latter is almost 50% ahead. Apple’s hardware is so powerful that the iPhone can play a lot of games smoothly in power-saving mode. The power-saving mode is mainly to control the CPU power. As long as it is not overheated, you can play smoothly, which also makes the heat dissipation insignificant.Conclusion
It is not that Apple does not care about heat dissipation. The truth is that there is really no need for stacking heat dissipation materials on the iPhone presently. From its kind of customers to its good hardware, only a small chunk of iPhone users will have reason(s) to complain about heat dissipation.
Editor note: This post continues the conversation of small business’ experiences with Yelp after SEJ’s Matt Southern wrote about their pending legal issues.
Yelp is supposed to be the last bastion on the Web for honest reviews. It’s a place where consumers are allowed to honestly and thoughtfully discuss their experiences with a business, and help others find services that will be useful to them. The star system keeps reviews easy to read, and multiple users posting about a location seem to give the reviews some credibility.
But not all businesses are pleased with how Yelp presents their work.Yelp Says: “You Can’t Pay Us to Remove or Reorder Your Reviews.”
Yelp, for its part, says that they separate the content and revenue side of the business. They aren’t clear on what that means for businesses and end users, which is exactly the point.
At least that’s the implied message. Yelp writes that they do not accept payment to remove reviews in their FAQ, but several business owners have claimed that Yelp sales people use negative reviews to drive conversions. The pitch involves paying for more control over a page, using terms like “controlling ad space.”
Some, like 64-year-old Randy Boelsems, say that the sales people will continually harass a business owner with offers to move bad reviews and buy up ad real estate for more control over a Yelp page. This pressure is very real. Business owners like Joe Hadeed in Virginia have even tried to fake reviews to raise their positivity. He tried to sue Yelp to reveal the identities of the defamers of his business, and the courts eventually ruled in his favor.Solicitation And Sales Practices
Wall Street Journal reported that the Yelp receives roughly six subpoenas a month that request reviewer information. Many of these relate to businesses who feel they have been unfairly defamed, or poorly reviewed. When these owners pay for the privilege, Yelp is quick to help them establish a greater presence on the website, even selling ad space to them on competitor pages. If these owners cancel, Yelp is just as quick to push those good reviews into the “not recommended” category.
Yelp seems to be using their power as a database to force businesses into paying them. First, they recruit you without your consent. Then they mask your best reviews, effectively creating a pay-wall where business owners must pay out to retain some integrity.Some Changes at Yelp
Yelp has quietly made a few recent changes to its design, layout and verbiage. Back in November, the link to the filtered reviews, which appeared on the bottom of all reviews changed from “Filtered Reviews” to “other reviews that are not currently recommended.“
Last month Yelp also changed the layout to the review pages by showing scrollable images on top.Is Yelp Guilty of Abuse? A Possible Solution
If anyone from Yelp or other review sites should happen to read this, I do have some recommendations for them on how they could change things to keep their customers happy:
Display the full name of the poster, including their Facebook link, if they have chosen to link it.
Require cell phone authentication or some sort of other authentication to validate the reviewer’s identity.
Disclose the user’s identity, including email, IP address and any other data in the business owner’s dashboard or at least when a business owner requests it.
Provide an arbitration service for a small fee to resolve disputed reviews. The reviewer should have evidence such as a receipt or an agreement that they have been to the business or used their services. If not the review should be removed. The business owner should be able to submit documents to prove whether the review is false. This service may also be outsourced to a few authorized companies, such as attorneys or reputation management companies.
What are your thoughts on Yelp’s practices? How would you keep Yelp honest for businesses and reviewers?
Featured Image: Deposit Photos
Let’s all take the time to stop checking our rankings, searching for new blogs in TLA and sending link request emails to envision an alternate universe, a world wide web where Google does not exist. An Internet where link anchor text does not influence ranking, because link based ranking does not exist.
Let us pretend that only on-page content and some other form of ranking algorithm, like consumer ratings, influence how users find web sites, and linking means nothing in terms of search. For a moment, let’s believe that PageRank is still a distant dream of Larry Page, who left Stanford to open a hugely successful In-N-Out Burger franchise and Matt Cutts followed up his NSA internship with a job at Booze Allen or possibly went down the road of stand up comedy.
Sure, it sounds like some sort of Zen riddle, but if Google did not exist … would you still build links? Instead of trying to build links to rank highly in Google, if Google did not exist, what would you link for? Relevant traffic of course.
If Google did not exist and Matt Cutts & the spam team were not picking through sites looking to penalize and expose sites which sell links or break the Google Webmaster Guidelines; wouldn’t you take a whole entire different approach to link building?Here are the ways I would practice my link building in a world with no Google.
1. Directories: No longer would anchor text heavy links from meaningless sites and directories have value and no longer would there be a market for freebie directories which accept any anchor text or link heavy spam sites set up for the sole purpose of selling anchor text links.
In a world with no Google, anchor text is not important anymore.
I would make sure these links are placed in visible areas. Not in the footer of news sites or any site where web surfers and readers would not see them, but in the direct view of the reader. Paying a bit extra, in my opinion, is worth the investment.
Similarly, I would set up exclusivity plans with sites I’m buying these high profile links, or even banners on, where none of my competition could buy a similar link. If the site directs relevant traffic which we can track, I’d set up a revenue sharing plan with these sites to secure a permanent link with little upfront costs. Again, such negotiations are worth the time and investment.
4. Public Relations and Editorial Placements : Reaching out to bloggers and news publishers with an active audience would be extremely powerful in a world without Google because those power links in the stories that everyone is reading. Having a link from USA Today would be incredibly powerful because it’s syndicated to so many other sources.
Press releases would still be useful, but mass press release firms that only exist to syndicate content in Google News or Google listings would not be as important. BusinessWire, MarketWire and Eric Ward’s URLWire would be essential to web product launchings, but close participation and relationships with influential web bloggers and journalists would be key.
I recently worked on a blogging project for Barry Williams (yes, Greg Brady) and good PR and communications have already led to coverage of the social project in USAToday, WashingtonPost, AdAge and New York Magazine. These authority links are eternally valuable in a world with Google, or without.
5. Presell Pages or Hosted Marketing Pages : I remember back in the days before Google I was working for a company which sold licensed I Love Lucy products. We located all of the I Love Lucy fan sites we could via the Yahoo Directory, DMOZ and UCmore. Then, each site linked out to other I Love Lucy sites, both personal or professional, via sidebar links or web rings (remember web rings?).
I then contacted these site owners, asking for coverage of the products I was representing. Some of the site owners were so happy we had reached out to them that they set up an entire page about the products, and linked to that page from their navigational linking. Back then, we were happy to get a link or a mention, but these product pages which are now referred to in the industry as Presell or Hosted Marketing Pages had much more influence than we could have imagined. And that was 8 years ago and those listings still exist today.
6. Blog Reviews : In a world without Google I would contact webmasters and influence them via praise or payment to set up such product pages on their sites. In the blogging world, we call these same ideals blog reviews and although some of the blog review brokers have databases full of amateur or spammy blog sites, they have a great deal of authority and respected blogs in their libraries as well.
Take Search Engine Journal for example, we have over 14,000 RSS Subscribers as tracked by Feedburner and 7,000 + readers a day from search engines and external blog coverage. If you are launching a product or service for the search marketing industry, wouldn’t it make sense to try and obtain some coverage on this site?
You can pay for blog reviews or develop relationships with those bloggers asking for reviews. Just do it. In return your product, site or service will attract the eye balls of hundreds, thousands or millions of readers. And that coverage includes a link to your site, which will bring traffic and may bring sales.
7. Guest Authoring : In a world without Google, mass article distribution sites would not have the value they have now, because now they more or less only exist so novice link builders can distribute an article with a footer link to hundreds of these sites, hoping to influence Google rankings.
Sure, chúng tôi shows up for just about every Google query, but the site itself was developed to be an article database for email newsletters to use, not really any website. In a world without Google I would identify 20 or so sites, blogs or veritcle portals to contribute original articles to, and make sure those articles link to the source, which is the site I own or represent.
Coming back to the Search Engine Journal example, I was told that one of my contributing authors landed a $80K deal via a referral that came from an article they contributed to this site (heck, maybe I should charge people to contribute). The point is, a carefully and strategically placed article on one authority site has much more value than mass distributed articles, in a world with or without Google.Ranking in Google By Not Linking for Google
These are just some examples of how linking like one who lives in a world without Google would theoretically result in better rankings in Google itself via high quality and authority linkage and placements. SEO should be performed with the end user in mind, and linking performed with alternative forms of ROI besides Google rankings.
Sometimes when I look at Google rankings for the keyterms which I am trying to rank on or my clients are, I’m exposed to all kinds of spammy listings, and a quick check of those backlinks exposes tricky and transparent techniques used to trick Google.
But I assure myself, and my clients, those sites will come and go, like someone cutting off traffic during rush hour, cutting in line at McDonalds or a crotch rocket swerving in and out of cars, they will get their just deserves in the end. If you can steer the steady path of righteousness, and plan a smart linking campaign with long term effects in mind, you can sit back, see how those cheaters work, and perhaps learn from them.
The conundrum in this Zen Koan, If Google does not exist, how would you link build for Google?, is that by link building without the goal of manipulating Google rankings, and by convincing yourself that Google does not exist, one can in fact, link build incredibly efficiently, especially for Google and other search engines.
What is HR?
Human resources (HR) is the process of overseeing and shaping all employee matters. The term “human resources” can describe either this work or your company’s entire workforce.What is an HR employee, and what do they do?
An HR employee carries out the functions involved with overseeing and shaping employee matters. Small business owners might handle these functions themselves at first, since they own the company and must ensure all the gears are turning.
Eventually, however, you may want to hire an HR employee or team. You can either hire HR in-house or outsource HR.
No matter which choice you make, HR employees will handle five main HR functions.
Staffing: Your HR team will use specific recruitment strategies to attract prospective employees. It will assemble a workforce of employees in various capacities, including part-time, full-time and freelance. Administering benefits typically goes hand in hand with this HR function.
Development: Your HR team’s involvement doesn’t end with successfully hiring employees. Your team must also develop new-hire training programs, sometimes from a foundation of industrial-organizational psychology.
Compensation: HR employees administer your payroll. They may also play a role in shaping your pay scale and the salary ranges you offer. They must clearly detail your business’s pay structure to stakeholders and employees.
Safety and health: Your HR team should educate your employees on best workplace safety practices. This HR function is especially important if your team works with potentially dangerous equipment, but it always matters. After all, something as ordinary as an extension cord running across the floor could cause someone to trip and injure themselves.
Employee and labor relations: All disputes between employees fall to your HR team to solve. Your HR team can also represent you if your employees unionize, strike or otherwise seek changes to their working conditions. If employee discipline is necessary, your HR team will enforce the disciplinary action policy it helped create.
Did You Know?
HR is also a key player in business strategy, providing data and analytics to inform issues like cost management and succession planning.The importance of human resources
A human resource specialist’s typical tasks include managing the recruitment and hiring processes, training personnel, staying up-to-date on business labor law compliance, and ensuring the workplace is running efficiently. HR specialists also generally deal with employee pay, benefits packages, and working conditions. Of course, they also deal with employee complaints or disciplinary situations. The central theme that connects these tasks is that the HR specialist acts as a link between the employer and the employee, and as a mediator who prevents or resolves workplace issues.
“It’s really hard as a business owner to put ourselves in the employees’ shoes,” said Steve Kurniawan, content specialist and growth strategist at Nine Peaks Media. “We mainly think from the perspective of how to grow the business – increasing revenue [and] winning markets – while the employees think about their promotions, their personal struggles. HR managers, on the other hand, will think as an employee and can better relate to the employees’ requests and needs.”
The benefits an HR manager offers a small business are clear, but at what point in the business’s life cycle could you justify the added cost of bringing on an HR manager?The right time to hire a human resources manager
There’s no single answer as to when a business should hire an HR manager. The window can shift depending on a business’s industry, growth rate, strategic planning and workload. Instead, look to these indicators to help you decide when the time is right to bring a dedicated HR specialist on board.When business roles start to become specialized
Your business’s general organization is one indicator of when you might need a dedicated HR manager. As businesses grow, their staff often shifts from general roles focused on necessary tasks into more specialized roles and, eventually, narrowly focused departments. As that shift occurs, it makes sense to develop an HR department.
“When a business is small, it is normal for everyone to be in ‘all hands on deck’ mode all the time,” said Jordan Brannon, president and COO of Coalition Technologies. “However, with any successful business, there is a point to be reached when you’re no longer so tight on cash and [staffing] that you cannot afford for your employees to specialize in their departments. At that point, it is time to hire a human resources person.”When the business grows to a certain number of employees
Business owners could also judge their need for an HR manager by reaching a milestone number of employees, such as 50 or 100. However, according to Doug Coffey, HR expert and assistant teaching professor at the Rutgers School of Management and Labor Relations, specialization remains the real differentiator.
“Having an HR manager will probably be a necessity when the company approaches 100 or more employees, but the telltale sign is when the business starts to specialize into functions such as IT, sales and operations,” Coffey said. “If you need a dedicated manager in those areas, you probably need the specialized knowledge of a human resources manager as well.”When a focus on revenue over HR tasks would boost the bottom line
Another method to determine whether you could benefit from a full-time HR specialist is to track your time spent on HR tasks and ask yourself, “Would my time be better spent growing the business?”
Once HR tasks begin demanding an inordinate amount of a business owner’s attention, it might be time to bring a dedicated HR manager to the team. If an owner’s efforts to grow revenue could cover the cost of a new salary and then some, the choice is clear.
“Business owners should track the time they’re spending on employee-related issues,” said Sharon DeLay, owner and president of GO-HR. “They should then consider what the impact to revenue growth would be if they spent that time instead in growing revenue. If the revenue growth activities would far outweigh – or would soon outweigh – the cost of HR resources, whether outsourced or hired, then it’s time to look at HR solutions.”
If you decide to handle human resources tasks in-house, the best HR software can help you stay compliant and efficient in managing your human capital.In-house HR vs. HR outsourcing
When you’re ready to offload HR work to someone new, you can either hire new employees or enlist a third-party firm. Both entities will have the knowledge and skills to handle HR in ways that might be more difficult for you. Consider the following factors before you make your decision.
Cost: In 2023, the median salary for an HR specialist was $61,920. The equivalent number for an HR manager was about twice that. Hiring another employee will also affect what you pay for benefits and payroll administration. So, ask yourself: Is the total cost of an employee ultimately less expensive than outsourcing?
Control: HR employees operate directly under your oversight. Outsourced HR firms must keep you happy to retain you as a client, but they may follow their own internal protocols. If you need control over and complete transparency with your HR functions, you might fare better hiring HR in-house.
Expertise: HR job titles are more diverse than just “specialist” or “manager.” Some HR employees are experts in specific HR segments – say, compensation or labor relations specialists. If you want an expert in each of these areas, you might fare better hiring an HR firm. These firms typically have experts in every part of the field, whereas one or two in-house employees may lack this specialization.
Employee relationships: Employees who work in office settings see each other daily, and remote teams likely communicate daily in some way or other. This notion extends to in-house HR employees, who will build actual relationships with your other employees. Such connections are tougher to cultivate if you outsource to an HR firm.
Delegating HR functions to one of the best HR outsourcing companies can connect you with better expertise. Outsourcing HR can also lead to a loss of control and pose challenges for employee relations.The risks of operating without an HR specialist
Business owners might feel they can go it alone, and perhaps they can, but failing to hire an HR manager comes with risks that could develop into serious consequences, both organizationally and legally. Before deciding not to hire an HR manager as your business scales, you should be aware of the potential problems to which you are exposing your business.Confusion and dissatisfaction
Not having a knowledgeable HR professional can lead to confusion and disorder.
“A human resource manager helps to establish fairness and consistency throughout the organization,” Coffey said. “Employees come to know what to expect with policy development in hiring, performance management, reward allocation [and] leave policies. By not hiring HR managers, businesses may add to employee turnover, one of the highest HR-related costs. This happens when dissatisfied employees leave due to inconsistent, time-wasting, unfair policies.”Legal and operational consequences
Beyond creating confusion or dissatisfaction amongst employees, the consequences for mismanaging logistics regarding HR-related tasks are steep. If a business owner is overwhelmed by the responsibilities of running the business and managing HR, they could find themselves in a record-keeping nightmare.
“When a business does not hire an HR manager, things will be missed,” Brannon said. “Important paperwork, completed photo releases that could lead to lawsuits, updating out-of-date paperwork, optimizing incorrect forms, and keeping employee tax information up to date are all essential points that could be missed by a business owner running their own HR department.”
Those documentation issues can quickly balloon into legal problems, potentially resulting in fines or lawsuits. While late paperwork might not seem to be a significant threat at first, it can be a slippery slope that creates extra work at best and a legal disaster at worst.
Did You Know?
Another HR outsourcing option is a professional employer organization (PEO). PEOs use a co-employment model, meaning your employees will appear on their books for legal and tax purposes.The necessity of HR in business
There is no escaping the need for HR. The issue is how to maximize efficiency and the return on your investment. Many business owners try to handle everything on their own until doing so is no longer feasible. However, when handling something as sensitive and critical as human resources, it’s crucial to establish a planned transition away from the startup phase, in which owners and staff all wear many hats, to a more specialized organization with dedicated department managers.
Thinking about HR early on – and at what point you should let go of specific responsibilities – will make it much easier to shift control to a dedicated HR manager down the line before things get messy.
Max Freedman contributed to the writing and research in this article. Source interviews were conducted for a previous version of this article.
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