|
|
Like this article? PLEASE +1 it! |  |
|
Outsourcing Human Resources: Smarter – and More Cost Effective - than Keeping HR In-House
| Guest post by: Ari Rosenstein |
Article Overview: Employers are turning to Human Resources Outsourcing firms, or PEOs (Professional Employer Organizations) to manage their company's HR processes for them. The HRO firm employs a team of experts that is able to manage the complete gamut of human resources administration more efficiently and cost effectively than private employers.
 |
Free Download - 5 Workmans’ Compensation Lessons Learned From the NFL Lockout By Ari Rosenstein |
Outsourcing Human Resources: Smarter – and More Cost Effective - than Keeping HR In-House
One of our sales reps recently returned from the field, after signing an HR outsourcing contract with an infomercial marketing and distribution firm. This was a growing company with fundamental HR needs shared by many, many employers. Their challenges were not unique or exceptions to the rule - they are the rule! Their concerns included:
1) Unsure if all their employees were classified properly
2) "Needed more structure" in their HR processes
3) Grew from 20 people to 55 but still had no dedicated HR person or expertise
4) Two office locations were not in sync with the other; had no consistent policies or protocol
5) Wanted training for supervisors on progressive discipline
6) Looking for HR advice, "independent of management", to help with compliance and work around internal politics
The Cost of HR Management
Experience reflects that until an employer has approximately 50 employees they do not employ a dedicated HR manager to administer all employee administrative functions. These functions, such as payroll, benefits administration, employee files maintenance, recruiting, training and employee relations, are shared by different employees in various departments. Usually, only after a business employs 50 or more employees, do they require a dedicated employee to manage all of these tasks.
This position, typically titled HR Manager or Director of HR, is a senior position that reports directly the President or CEO of the company. They also carry a hefty price tag. According to Salary.com, the median salary of an HR Manager in Los Angeles, California in 2011 is $95,000. Adding tax and benefit load, a small employer of 50-100 employees is looking at a position that will set them back $130,000!
Human Resources Outsourcing
Alternatively, employers are turning to Human Resources Outsourcing firms, or PEOs (Professional Employer Organizations) to manage the entire process for them. The HRO firm employs a team of experts that is able to manage the complete gamut of human resources administration more efficiently and cost effectively than private employers. And this comprehensive service comes with a price tag at a fraction of hiring a single, internal HR manager.
The HRO's team of experts manage:
• Labor law compliance
• Employment administration
• Personnel files, documentation and forms
• Mandatory postings
• Payroll and tax
• Vacation and benefit accruals
• Health Insurance
• Voluntary/optional employee benefits
• Workers' Compensation
• Safety Consulting
• Management training
• Recruiting
If your company faces challenges in any of the above areas, consider outsourcing human resources functions before bringing it in house. You will not only receive superior human resources support, but you'll do it at a fraction of the cost!
10 Critical Factors to Consider Before Engaging in HR Outsourcing
Human Resources Outsourcing
3 Deadly HR Outsourcing Mistakes You Must Avoid
A Beginner’s Guide to HR Outsourcing for Small Business Owners
3 Cs to Consider While Selecting a Vendor for Outsourcing Your Small Business Needs
News for Software Outosourcing Development
3 Ways to Reduce Employment Costs with Human Resources Outsourcing
6 Shortcomings of HR Outsourcing for Small Businesses Owners
A Brief Overview of Today's Outsourcing Buzz Words
How Recruitment Process Outsourcing Can Help Your Business Stay Focused
Human Resources Outsourcing & Small Employers: A Perfect Match in a Tough Economy
Outsourcing ‘has become a mandate’ for recession-hit firms
The Human Resources Outsourcing Solution for Small Business
Software Outsourcing Trends
Truth in Numbers
Business Process Outsourcing manages Accounts
How IT Outsourcing can Enhance your Start-up Growth Rate
Small Business Growth Tip: Don’t Try To Do It All Alone
Four Ways HRO Firms Can Help Boost Employee Morale and Improve Productivity
Are Men Smarter Than Women
Related Forum Posts
HRPreneur
- Hi everyone,
I am new to the forum and I recently started my own Human Capital (HR) consulting firm called HRPreneur Inc. HRP focuses on making human capital a strategic differentiator for SME's.
Below is a summary about HRP;
Who We Are:
HRP is a Human Capital consulting firm with 30 years of experience that becomes an extension of your company by providing a full array of services to help you create a highly engaged workforce focused on achieving strategic results in order to build a long lasting great company!
Mission:
HRP provides small and medium sized businesses a Strategic HR Business Partner to increase employee engagement, resulting in cost savings, increased productivity and results at an affordable rate!
Vision:
To inspire and warrant SME's reach their full competency!
Cost Effectiveness:
We provide over 30 years of experience at a fraction of the cost at a strategic executive HR business level
You will save between 50% to 60% in costs per year on salary, bonus, benefits, training, office space alone
We will provide you additional cost efficiencies through our services
Services:
• Strategic Human Resources Planning
• Organizational Redesign
• Change Management
• Organizational Culture Development
• Employee Engagement Programs
• Leadership Assessment and Development
• Compensation Design
• Talent Acquisition
• Assimilation and On-Boarding
• Performance Management
• Talent Management & Succession Planning
• Human Resources Due Diligence
• Human Resources Audit
• Full Service HR Outsourcing
New topics
- Thanks Evan. A Human Resources section would be great. Information and templates for hiring the right people, training, retention ( always an interesting an useful topic), conducting performance appraisals, information on discipline and documentation, conflict resolution, exit interview information, etc.
This would be really useful because most small companies don't have set HR guidelines/policies.
Thanks!
New Small Business Topic
- Hello everyone,
I'm on the lookout for new topics to add to my site. We just launched a Franchising section and are planning Human Resources section. Do you have any thoughts for a new section?
Here's a list of what we currently have:
Angel Investors
Branding
Bank Loans
Business Coaching
Business Plan
Franchises (New)
Insurance
Legal
Marketing
Public Relations
Sales
Small Biz Loans
Venture Capital
[Suggestion] Human Resources Forum - Thoughts?
- I just noticed about 5 minutes ago that there is no forum for Human Resources discussion. It may not be a large part of startups that are sole proprietorships, or even partnerships, as most groups starting up a company know each other, their respective roles, and the company really well. But as companies expand and become more successful, HR becomes an increasingly large contributing factor to a Small Business' success.
[size=130:3anbwuqp]Short version: Do you think an HR forum would be a worthwhile addition to the forums?[/size:3anbwuqp]
Re: How to Stay Motivated
- Thanks for posting this, Matthew. Keeping the motivation strong is something I've really been struggling with. Donna, I think I was just not pushing as hard as I need to and getting maintenance instead of progress.
Share this article with your friends. Fund someone's dream.
Leave a comment below or share on the left and you'll help support entrepreneurs in Africa through our partnership with Kiva. Over $50,000 raised and counting - Please keep sharing! Learn more.
by: Erin Ferree, Small Business Branding Coach
Best Automated Forex Trading Strategy
Build Your List with Joint Venture Giveaway Events
May 2012 Top 100 Social Media Experts to Follow on Twitter
What to measure to be phenomenally successful in business
10 mistakes of media relations
Get advice & tips from famous business
owners, new articles by entrepreneur
experts, my latest website updates, &
special sneak peaks at what's to come!
9 tips to increase ROI in PPC Campaigns
The True Cost of Employee Turnover
Are You Too Good for Your Job?
Email us your ideas on how to make our
website more valuable! Thank you Sharon
from Toronto Salsa Lessons / Classes for
your suggestions to make the newsletter
look like the website and profile younger
entrepreneurs like Jennifer Lopez.