Five Ways and Means to Cope up Without an In-house HR for SMEs


In my previous blog, I discussed whether and when an HR is really required for an SME ( As promised, in this column, I would like to discuss the five ways and means to cope up without an in-house HR for SMEs. Depending upon the nature of business requirements and industry structure, companies can choose from these options.

1. Seeking a HR consultant’s support:
A management consultant helps companies with his strong knowledge of business fundamentals and vast experience across diverse industries. These professionals work with several clients and hence encounter different types of issues at workplace. With experience in dealing with different types, range and number of issues, an HR consultant is an expert not only in his domain, but also across diverse industries. Hiring an HR consultant is suitable when unbiased, integrated perspectives for decision making are needed and the same implemented.

2. Obtaining support through HR Advisory Services:
Specific employee related concerns that need only specific support can be handled by utilizing HR Advisory services. This option will be useful when complex and operational issues involving work on piecemeal basis for a specific duration are to be resolved. A well versed HR consultant with experience in both HR strategy and implementation will facilitate this saving your time and efforts and is generally more cost effective compared to an in-house resource or hiring a consultant.

3. Training an existing resource in admin/secretarial or other roles to function as a stand-by HR:
Typically in SMEs, a long-standing Accounts or Finance executive or an all-rounder is often seen as an individual responsible for HR related functions including payroll management, statutory compliances and compensation strategy development. Since the employee is already well-versed in some of the most important areas within HR, it is a good idea to develop his/her capabilities in other strategic and operational HR activities by sponsoring/facilitating his/her training programs.

The advantages to this approach are: avoiding direct cost of an in-house HR, providing scope for employee development, offering leadership opportunities, reducing monotony at workplace and preventing attrition in the company etc.

4. Outsourcing your entire HR function:
Outsourcing HR services are useful to companies to take care of employee operational activities like intense and niche recruitment, employee engagement activities, complex statutory and regulatory requirements, employee database and records and grievances/queries etc. This option will be cost effective when a large HR team is to be put in place.
Outsourcing services are suitable for businesses that can disconnect their mainstay business operations with that of their routine day to day employee operations. This is one of the most commonly practiced means and ways of coping up without an in-house HR.

5. Insourcing:
In consulting industry, this refers to having a consultant working for the company (client organization) as a direct employee for a specific duration or on a specific assignment. While in outsourcing much of the work assigned is done at consultant’s office (especially for HR) in insourcing it is done at client’s premises. In this case, the consultant performs the same duties as that of an in-house resource and also establishes processes, sets up procedures and systematic guidelines to ensure smooth functioning of employee activities even in his absence!!!

-Ms Uma Bhanu Kondury, Senior Consultant, Prajwal Business Services Pvt. Ltd.,

PS: For information about our services in HR, follow the links below:

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