Is outsourcing some or all of your HR functions the right move for your business? If so, what might that look like? What are the options when it comes to contracting with a third-party company to help handle your personnel needs?
As noted by the Society for Human Resource Management (SHRM), more than half of all industry professionals have opted to outsource HR services. The two most common reasons for their decision are cost and time efficiency. In a nutshell, outsourcing certain tasks enables you to spend more time on core business strategy and activities.
Other reasons include:
- Increased compliance with employment laws, and,
- The wider range of services, experience and expertise offered by outsource firms.
A leading option for HR outsourcing is partnering with a professional employer organization, or PEO. Your company enters into a co-employment relationship, in which your PEO becomes employer of record and you remain the on-site employer. Your workload and financial responsibilities are lessened, as your PEO handles taxes, workers’ compensation, and any number of other duties.
- As an added benefit, PEOs can obtain reduced rates on such key benefits as health insurance and retirement packages, as they combine employees from all their clients. This helps enhance your competitive position in the talent marketplace.
Which Services to Outsource
A lot of responsibilities, activities and tasks fall under the HR umbrella. When determining which ones to outsource, you may want to consider:
- Payroll and tax services: Running accurate, on-time payroll can be one of the most challenging aspects of HR management. Not only is it highly labor intensive, but it can pose serious problems if your company is not in full compliance with federal and state regulations. Outsourcing options include payroll processing, FICA, FUTA and SUTA payments and filings, time and attendance interface, new hire reporting, immigration verification, and file management and storage.
- Benefits administration: You may want to clear your desk of the day-to-day administrative tasks associated with ACA compliance, benefits plan negotiations, open enrollment, supplemental and voluntary benefits, Section 125 and flexible spending accounts, retirement plans, premium reconciliation, or COBRA, HIPAA and ERISA compliance. You can still have the final say in all strategic decisions; you just don’t have to do all the legwork.
- Risk management: There are myriad regulations that you must comply with, including workers’ compensation, OSHA, and Ban the Box requirements. Not only are they complex to begin with, but they also tend to change on a dime. Your outsource experts specialize in keeping up with all these areas, as well as claims management, liability insurance, and worksite assessments.
- Other HR functions: Training, job descriptions, employee handbooks, unemployment claims, audits, and maintenance of policies, procedures and forms can all be handled by an outsource partner.
Looking to Outsource Some of Your Business Functions?
Since 1995, Lyons HR has provided customized HR solutions for small and mid-sized businesses to help them drive performance, control costs, and mitigate liability. We were the first PEO certified by the Internal Revenue Service (IRS), providing our clients with the highest levels of security and financial assurance. And, we are fully accredited by the Employee Services Assurance Corporation (ESAC), a distinction earned by only five percent of all PEOs. Contact us today to discuss a possible partnership with your growing company.