Outsourcing human resources functions saves valuable time and money and ensures that the job is done right. HR outsourcing companies are the experts and your business may benefit from their specific knowledge.
HR outsourcing companies are experts in dealing with people. Using feedback from your company, outsourcing firms establish rules for compensation, bonuses, disciplinary actions, and other work-related processes. HR firms are in constant contact with compensation, benefits, and job analysis specialists, occupational analysts, employee benefits managers, and specialists for strategic planning and program launch. This holistic approach to HR function means well-rounded decisions that benefit both employees and management.
Common human resources tasks you can delegate to an objective third party include responsibility for providing processes and procedures for dealing with employees on a day-to-day basis, including recruiting top talent to take on key positions, training new hires and providing veterans with continuing education, and arbitrating disputes between employees.
Plus, HR outsourcing companies are beginning to specialize within industries. For example, some HR outsourcing companies specialize in health care. They know the federal regulations governing such industry-specific topics as coding and billing. Other companies are experts in legal, construction, or engineering. And while these specialists might cost more, their industry knowledge more often than not makes up for the fees they charge. In the face of sweeping federal and state changes with respect to accountability and compliance, small, medium, and large companies can ill afford a violation that could have been prevented with some professional guidance.
The following are the top tasks outsourced by small businesses:
- Payroll processes: Tax-sheltered annuities, garnishments, bonuses, salary structuring, and pay-day periods
- Benefits management: Health, short- and long-term disability, dental and vision, and life insurance options
- Employee data collection and management: New hires, relocations, and promotions and demotions
- Information systems processes: Database management, intranet and Internet, connectivity, queries and caches, networked printing
- Contact center functions: End-user support, remote desktop management and repair, training and education
When choosing an HR outsourcing firm, one of the primary benchmarks should be experience and track record. The HR industry is constantly changing with procedures and regulations that require near constant study. Top outsourcing agencies are in tune with changes in the field and how they apply to the business operations of their clients. They’re often able to make meaningful suggestions on how to handle a variety of situations that invariably arise.
Other factors to consider are connection with industry associations. Association certifications are a good indicator of the flexibility and preparedness of the potential company. Also, inviting an HR consultant into the organization is a shrewd business move. The consultant can make pertinent recommendations on the type of outsourcing company that would be a good fit for the client.
Outsourcing HR has shown itself to be a slow-moving trend that has caught on only in the past decade. Companies that were hesitant to add another monthly bill to operating expenses are finding the removal of such a stressful operation to be worth the expense. While HR outsourcing has remained relatively flat since 2005, it is expected to increase.