Many small businesses find it difficult to keep up with the latest human resources compliance standards, employment laws and other matters pertaining to personnel management. Outsourcing HR can be a lifesaver for growing companies. Follow these tips for outsourcing HR administration successfully.
1. Involve the Right People
Choose a project leader to spearhead the initiative. The leader can invite the president and other internal stakeholders to the appropriate meetings to assess possible outsourcing vendors. By including the right people in the discussions and evaluation process, the outsourcing vendors will be aware of all possible needs and key internal stakeholders will be kept abreast of discussions.
2. Identify the Level of Support Needed
Choosing your outsourcing partner for HR needs depends on the desired level of support. With personnel management taking up an estimated 25 to 35 percent of a business owner's time, according to Score, the more you can outsource, the more time you'll free up for other tasks.
Choices to outsource HR administration include:
- Help desks: Help desks provide self-service help for human resources needs. Secure cloud-based portals enable employees to review benefits and policies.
- ASOs: An HR Administration Service Organization offers a flexible solution for many small businesses. Your company remains the employer of record, but you can outsource many routine employment functions to an ASO, such as benefits administration and job descriptions.
- Professional Employer Organizations (PEOs): When you contract with a PEO, you form a co-employment relationship with the PEO. Your firm and the PEO are both employers of record for your employees. You retain daily management responsibilities but the PEO handles payroll, taxes, employee records, human resources and benefits, and it canhelp manage HR compliance.
3. Select the Right Vendor
HR vendors vary in the amount of personal service they offer. Depending on how adept your company is at handling its HR needs, you may need a partner who provides a personal representative to answer questions, or 24/7 service. Make sure you understand exactly what you're getting with any HR vendor.
4. Transfer Knowledge
Onboarding, or the process of transitioning your HR, needs to be an integral part of the vendor's services. They must be willing to spend the appropriate amount of time and attention to detail on your account. Be sure to provide details about your business's process, organization and systems. They must thoroughly understand your culture and personnel needs to successfully do their job.
5. Prepare Your Organization
Your HR transition shouldn't be a mystery to anyone. Inform your entire company, including current HR admins, leadership and all team members about the change. Your employees will rely on the HR vendor to help them with everything from paychecks to medical care. Knowing who to go to with their needs will help everyone feel more confident in the transition.
These tips for outsourcing HR administration can help you choose the level that's best for your business and make a smooth transition into the world of outsourced HR.
Featured on THRIVE
SIGN UP FOR THE THRIVE NEWSLETTER