Outsourcing Human Resources
Should you outsource HR? Before deciding whether or not to outsource HR, let’s first define the problem. Does any of this sound familiar?
Are you frustrated with expensive health insurance options?
Did you get a huge renewal rate on your health care?
Do you have employee issues crop up that you don’t have answers to?
Are you working evenings or weekends doing routine HR tasks, like payroll, taxes, or compliance paperwork?
Are you ignoring HR issues and hoping they don’t turn into something costly?
Where do you turn for answers on HR issues?
What happens when your business grows? Can you handle the hiring, employee lifecycle, and compliance needs at scale?
HR Outsourcing Options
If none of the above questions sound familiar, great! You’re doing an excellent job of handling HR for your business.
However, if any of those points ring true, then it might be time to look for HR outsourcing options. So what are the options? Here are a few choices:
Status quo. Keep doing what you’re doing!
Find an insurance broker. The insurance broker can help if your concerns are only around health insurance rates. He or she may be able to find better options to insure your employees. That said, an insurance broker is not designed to help with HR, payroll, or safety. Which means you’ll need to find support in another company for those issues or struggle with the broker's “add-on” HR services.
Find a payroll provider. There are many good organizations that can serve your payroll needs. And, while some offer services that include HR, that is not their core competency. You may get payroll processed and struggle with other needs.
Find a staffing agency. Again, some organizations are built around recruiting, hiring, and onboarding new employees. And, while they may be very good at that, they don’t have the bandwidth to handle the full HR spectrum of skills.
Reach out to a PEO. PEOs are uniquely suited to handle all of your outsourced HR needs, including payroll, benefits, workers’ comp, and risk management. And they are specifically designed to meet the needs of small to mid-sized businesses. For more, visit About PEOs.
The pros and cons of outsourcing human resources.
Many small and medium businesses find their resources stretched thin, so they choose to double down on their strengths and outsource other tasks to outside experts. If you’re debating outsourcing human resources for your business, learn the pros and cons in this video.
Outsourcing HR Frequently Asked Questions.
A few frequently asked questions – and answers – for those interested in learning more about outsourcing your human resources to certified* pros.
HR outsourcing is a contractual agreement between an employer and an external third-party provider whereby the employer transfers the management of, and responsibility for, certain HR functions to the external provider. Many types of HR outsourcing options are available to employers.
Human Resource Outsourcing is a process in which a company utilizes the services of the third party to take care of its HR functions. ... HR outsourcing helps an organization to gain cost and time efficiencies and provides cutting edge over their human resource strategies and improves services to their employees.
Here are the HR functions that are most commonly outsourced:
- High-volume recruiting.
- Temporary staffing.
- Background checks and drug screening.
- Benefits administration.
- Creating/updating employee handbooks and policy manuals.
By outsourcing, you are paying for what you need, not paying for what you don't need. Whether it is a contract that spells out what you are getting or an hourly rate, you will end up paying less for the service than someone you have to pay a salary too. You will also save on the cost of benefits and payroll taxes.
Organizations that focus solely on providing HR services will have much more advanced technology and processes in place to provide those services. Outsourcing your HR functions to such an organization can help to streamline your HR processes, resulting in more effective and efficient HR management and administration.
Pros and cons of HR outsourcing
Pros of HR outsourcing:
- Saves money. Small companies and start-ups usually can't justify the expense of hiring a full-time HR employee. ...
- Allows staff to be more strategic. ...
- Vertical expertise. ...
Cons of HR outsourcing:
- Reduced human touch. ...
- Loss of in-house expertise. ...
- Less availability.
Expertise You Can Use Now
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Transitioning to the HR Outsourcer
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Understanding the Outsourcing Agreement
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HR Blues? Let's Talk.
Our veteran team of SHRM-certified human resources consultants and our access to employment law attorneys provide your business with unparalleled HR expertise. Add Axcet's HR team to your bench so you can get back to what matters. Reach out today.