Executive Report

Reasons to Outsource HR

Today’s human resources departments are in overdrive. The churning of the labor market with the Great Resignation has left many businesses struggling to meet their targets. Turnover rates and quit rates are at all-time highs. Attracting, retaining, developing, and even replacing employees is taking a greater share of administrative time. Small companies are not just competing with small companies, they are competing with large ones as well.

There are also social changes at play. The workforce of today has changed. Prospective employees expect more from employers. The way we work has changed. The labor market has changed. Competition for talent is fierce. Employers need to offer attractive benefits packages. Training, connection, and flexibility are all important to attract and retain talent. Your human resources department must be able to successfully communicate the values and benefits of working for your company.

Most businesses are driven by a passion for the products or services they offer their customers. This is the core of your business. Your growth is tied to maximizing the time and attention you can allocate to the activities that bring value to your customers. No matter what this value is, your employees are the key to delivering the promise of your brand to your customers. Your employees are your biggest investment and can be your greatest asset.

Too often, managing the human resources functions of your business is time-consuming, detail-oriented, and requires a deep knowledge of changing regulations and compliance. The days when a business could successfully assign the HR functions to the back office have long passed. There is a complexity to the regulatory landscape that takes solid expertise and a commitment to continuous learning.

Outsourcing brings world-class human resources talent to small and medium-size businesses. The return on investment for companies that outsource human resources is impressive. According to National Association of Professional Employer Organizations, clients of Professional Employer Organizations (PEOs) experienced 7-9% faster growth, experienced 10-14% less turnover, and were 16% more likely to report increases in profitability than comparable businesses who did not partner with a PEO. Partnering with a qualified PEO may be one of the biggest drivers of success for any business. Small businesses that contract with PEOs are highly satisfied with the services. Ninety-eight percent of business owners using a PEO would recommend them.

Outsourcing Human Resources takes so many recurring responsibilities off small and medium business owner’s plates, including:

  • Payroll administration: PEOs manage everything from payroll processing to end-of-year W-2 preparation.
  • Recruitment and retention: PEOs can manage all human resources needs from recruitment and onboarding to employee relations.
  • Risk management: A PEO will ensure that your human resource policies and practices meet all regulatory requirements on the federal, state, and local levels.
  • Employee training and development: PEOs can manage required training and sector-specific training in a cost-effective manner. They are also able to support staff development and performance improvement.
  • Customized benefits administration programs: PEOs can efficiently administer benefits and are often able to assist companies in securing benefit programs that give them an edge in the competitive labor market.
  • Strategy development and consults: PEOs can provide expertise to help businesses develop strategies for recruitment, retention, and employee engagement. Your PEO is also a trusted source when issues arise that need specialized human resources knowledge.

How Do You Know If Outsourcing Is Right for Your Company?

  • Are you a small to medium-sized company that wants to be able to offer world-class benefits to your organization?
  • Are recruitment, training, and retention creating a bottleneck for your growth goals?
  • Do you feel like your business will benefit from human resources expertise to reduce the risk of litigation and costs of compliance?
  • In key times of your business cycle, is it all a hands-on deck for meeting human resources deadlines? Do payroll and end-of-year W-2s tie up your administrative and accounting staff?
  • Would you like expert support in developing strategies for employee recruitment retention and engagement?

Every company needs a world-class human resource team to tip the balance in their favor. Human Resources is a complex and dynamic field that requires specialized training. Small and medium businesses can be at a disadvantage because the HR team must wear many hats. Outsourcing makes sense: you get the specialized expertise your company needs in the amount you need it and at a price you can afford. Outsourcing human resources frees your time and lets you focus on your core business activities.

Companies benefit, managers benefit, employee benefit, and customers benefits. Contact us to start a conversation today.

Susan E. Manno, P.A. SCP, CEO & Director of Legal Compliance, TANDIUM Corporation

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