Tweet

The Human Resources Outsourcing Solution for Small Business

Guest post by: Ari Rosenstein

Article Overview: Human Resources Outsourcing has been growing in popularity as a way for small employers to mange their employee administration for efficiently and cost effectively. The principal of HRO is simple: by entrusting non-core, non-revenue generating tasks to an outside expert or firm, the business can comfortably focus on other critical areas, assured their human resources systems will be managed professionally and efficiently.

The Human Resources Outsourcing Solution for Small Business

As the economy continues to improve and stabilize, employers have begun refocusing their efforts on growth and profitability. Many have begun hiring new staff as evidenced by the slowly dipping national unemployment rate. Others are using the time to restructure and regroup, turning to activities that have been neglected during the previous three years. Developing new products, capitalizing on burgeoning sales opportunities, or investigating new financial and banking relationships are just a few of the actions employers are taking to gain traction in the strengthening economy. In almost every organization, it is the employees that drive their success. From growth and product development, to customer service and quality assurance, it is the people who will ultimately have the greatest impact on the company's future profitability and stability. A key to business success in today's environment will be concentrating on improving the human resources systems within the organization: developing and motivating their employees, protecting their companies against employment lawsuits, and researching more efficient and cost effective HR systems.

The obstacles faced by most businesses are the limitation of time, resources, and manpower to effectively improve their HR infrastructure. The level of expertise and know-how required to impact the HR systems is usually beyond their means. More often than not, these critical areas are left by the wayside as other tasks dominate management's time and energy.

The HR Outsourcing Solution

A solution that has been growing in popularity over the past decade has been to bypass the conflict completely, by outsourcing the complex, time consuming, or unproductive tasks relating to employee administration. The Human Resources Outsourcing industry has continued to grow in recent years, despite the global recession.

Human Resources Outsourcing can take on many appearances, from complete end-to-end processes, to specific, discreet functions. But in the end, they all share the same principle: by entrusting non-core, non-revenue generating tasks to an outside expert or firm, the business can comfortably focus on other critical areas, assured their human resources systems will be managed professionally and efficiently.

The HRO firm employs teams of experts in a wide range of disciplines. It functions as the business's off-site HR department, handling all employment related tasks in a more timely and cost-effective manner. Human Resources Outsourcing services can include any, or all, of the following services:

• Labor law compliance

• Employment administration

• Forms and documentation

• Management and employee training

• Payroll and tax services

• Workers' Compensation Insurance

• Safety consulting

• Employee benefit packages

• Retirement Planning

• Recruiting

Better Insurance Products and Rates

In addition to the valuable services they provide, an HR Outsourcing firm can offer their clients economies-of-scale, providing more robust employee benefit plans at extremely competitive rates. HRO firms provide this by pooling thousands of employees into a group plan, enabling them to negotiate rates and plan options usually available to only their larger competition. Now, an employer with just 20, 30, or 50 employees can offer their employees a robust benefit offering typically found within a big corporation with hundreds or thousands of employees.

Finally, workers' compensation insurance is also negotiated on similar terms. The HRO can present millions of dollars of workers' compensation premiums to the carrier, instead of just thousands. This enables the HRO firm to pass the group discounts to their smaller employers, often resulting in significant insurance premium savings.

Whether your company is looking for added human resources support, or assistance in reducing your employment risks, or simply investigating alternative insurance products, human resource outsourcing should be given serious consideration. More often than not, the savings experienced through Human Resources Outsourcing offset the service fees, making HRO a win-win relationship.

Related Articles
  3 Deadly HR Outsourcing Mistakes You Must Avoid
  Human Resources Outsourcing
  10 Critical Factors to Consider Before Engaging in HR Outsourcing
  A Beginner’s Guide to HR Outsourcing for Small Business Owners
  3 Ways to Reduce Employment Costs with Human Resources Outsourcing
  6 Shortcomings of HR Outsourcing for Small Businesses Owners
  Human Resources Outsourcing Maintains Double-Digit Growth
  How to Make Better Outsourcing Decisions
  Four Key Distinctions between between HRO and PEO Services
  3 Cs to Consider While Selecting a Vendor for Outsourcing Your Small Business Needs
  Human Resources Outsourcing & Small Employers: A Perfect Match in a Tough Economy
  Outsourcing Human Resources: Smarter – and More Cost Effective - than Keeping HR In-House
  Outsourcing Payroll Has Benefits While PEO's Do Much More
  How Recruitment Process Outsourcing Can Help Your Business Stay Focused
  Vital Reasons why Small to Midsized Businesses Should Outsource HR!
  8 Warning Signs That an Outsourcing Job is Failing
  The Benefits of Outsourcing Your Employee Recruitment Process
  A Brief Overview of Today's Outsourcing Buzz Words
  38% of software development professionals use outsourcing
  Truth in Numbers

Article Tags: HR Outsourcing, HRO, Human Resources Outsourcing



Related Forum Posts
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
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
[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]
The Little Man Introduction - Good Morning, This is John Hoover from Little Man Consulting. Our company has been floating along as a after thought for a few years. This year we decided to make a go of it. So far we are doing great. We are Virtual Administrators, Web Developers, Database Designers, and Software instructors. Basically, if you have someone in your office to do it, we can do it virtually. Our company was created to "Provide Big Business Resources to the Small Business". Wish me luck, I plan on revolutionizing the small business world with this!
Startup Challenges - Kevin - it's a great read - you should pick it up! John - what kind of services are you offering? Your signature says "Providing Big Business Resources to Small Businesses" I have always found big companies to be hard to work with and slow to make decisions but smaller companies are more risk-tolerant and understand the online world.


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.

Newsletter

Get advice & tips from famous business
owners, new articles by entrepreneur
experts, my latest website updates, &
special sneak peaks at what's to come!

Name:
Email:

Popular Articles

What Is The Foundation for Your Vision?

What is an Adaptive Organization

Suggestions

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.