- By outsourcing Human Resources, businesses can alleviate the burden of time-consuming tasks and focus on more strategic initiatives.
- Depending on their size and the level of involvement they require, you can partner with a Professional Employer Organization (PEO) or an HR Outsourcing provider.
- AccessPoint provides a comprehensive suite of Human Resources services for companies across various industries. Learn how we can help!
HR professionals are often buried in a myriad of mundane daily tasks that keep them apart from strategic initiatives. By outsourcing Human Resources to an external provider, HR teams can take routine, time-consuming tasks off their plate and focus on growth.
From calculating taxes and handling Payroll, to managing healthcare benefits for your entire workforce, there are many activities that your business can leave in the hands of experts, saving your business precious time and resources.
In this article, we delve into the specifics of outsourcing Human Resources, its advantages, and some considerations for choosing a third-party provider.
Let’s get started!
Human Resources Outsourcing (HRO) involves delegating day-to-day HR activities — such as payroll, benefits administration, and compliance — to a third party or external provider, enabling businesses to focus on higher-impact tasks.
Depending on their size and needs, there are different alternatives to outsourcing your business’s HR tasks, such as:
- Human Resources Organizations
- Professional Employer Organizations
Let’s take a closer look at each of them!
The Difference Between PEO and HR Outsourcing
One of the key differences between a Professional Employer Organization and an HR Outsourcing organization is their scope:
PEOs focus on small and mid-sized businesses, while HRO providers are oriented toward larger businesses that already have an HR department.
When a company partners with a PEO, there’s a co-employment agreement between them. This means that the PEO takes responsibility for certain employer-related tasks like regulatory compliance, payroll, and benefits administration — though it can also assist with recruiting and onboarding. Under this model, the business owner remains in control of daily operations and business decisions.
With HR outsourcing organizations, on the other hand, businesses retain a higher level of control over their HR strategy, as they can choose which specific functions they want to outsource and which ones they prefer to manage internally. For growing businesses that need more flexibility and scalable solutions, this might be a more convenient option.
Outsourcing Human Resources Services
When it comes to outsourcing HR, there’s a wide array of services to choose from.
These are the main areas that Human Resources Organizations can help you with:
- HR Management. HROs can support businesses with a range of employment-related issues, from preparing documentation & employee handbooks for new hires to processing unemployment claims and providing termination assistance.
- Payroll. Making sure that all your employees get paid accurately and on time is one of the most crucial HR tasks. HROs can take over payroll processing, calculate taxes, and generate reports so you can track labor costs.
- Benefits. For smaller businesses, getting access to competitive healthcare plans is not easy. By outsourcing benefits to an HR organization, you can expand your employee benefits offer at a reasonable cost, and delegate all the complex tasks associated with managing benefits.
- Risk & Compliance. Keeping up with ever-changing compliance & safety requirements can be a struggle. HROs can help your business stay on the safe side by ensuring compliance with labor laws, industry regulations, and safety standards.
- Recruiting & Hiring. Need to find the right talent for your company? HROs can handle the entire recruitment process for you. This involves creating job descriptions, sourcing candidates, conducting interviews, and facilitating the hiring process.
Outsourcing Human Resources Advantages
Outsourcing HR can offer a lot of value for businesses of all sizes and industries. From reducing costs to increasing efficiency, let’s explore some of its main advantages:
- Lower costs. Hiring and maintaining an in-house HR team can be very expensive — think salaries, benefits, and training expenses, but also facilities and rents. By outsourcing HR functions to a specialized provider, SMBs can avoid these costs and pay only for the HR services they need, without resigning quality.
- More time to focus on high-impact tasks. By delegating routine, administrative HR tasks businesses can have more time to concentrate on their core competencies and strategic goals.
With outsourced HR professionals handling the most time-consuming tasks, businesses can focus on creating a positive work environment and designing strategies to attract and retain talent.
- Access to a pool of experts. Outsourcing HR gives you access to skilled professionals with specialized knowledge in various HR areas, such as recruitment, employee relations, and compliance.
- Scalability and flexibility. Growing businesses can benefit from outsourcing, as they can easily scale HR services up or down based on their current needs.
- Ensure compliance. HR Outsourcing providers stay up to date on the latest employment laws and regulations, reducing the risks (and high costs!) of non-compliance.
- Improve technology and systems. For small businesses, implementing cutting-edge HR software can be too expensive. However, HR Outsourcing companies can help close the gap and improve efficiency in HR processes like payroll and time tracking.
How to Choose a Human Resources Outsourcing Provider
So, you’ve considered the advantages of outsourcing HR, and you are ready to take the next step.
But what to look out for when choosing an HR outsourcing provider? Here are a few tips to make an informed decision:
- Understand your business needs. Identify the specific HR functions you want to outsource, whether it’s payroll, benefits administration, recruitment, or a combination of services.
- Do your research. Seek references from current or past clients of different HRO providers. Client testimonials and reviews can provide valuable insights into their reliability, responsiveness, and the quality of their services.
- Prioritize a provider that can scale its services as you grow. A flexible HRO partner should be able to adapt to changes in your HR needs, whether you’re expanding, downsizing, or undergoing organizational changes.
Meet AccessPoint: A Full-Service Human Resources Outsourcing Organization
Outsourcing human resources to an external provider allows businesses to focus on strategic initiatives and growth while saving valuable time and resources.
AccessPoint offers a suite of HR services for growing businesses across various industries, from healthcare to manufacturing. Based on your specific needs, we provide tailored, flexible solutions to handle payroll, compliance, benefits, and recruiting, so you can spend more time focusing on high-impact tasks.
Contact us to learn how we can help your business thrive with our HR outsourcing services!